7 Obstacles to Saving for Retirement

Don’t let these common financial setbacks ruin your retirement years.

Older couple paying bill online using a digital tablet at home
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Debt. Too much debt makes it especially difficult to save for retirement. Just over a quarter (26 percent) of Americans say getting into debt has reduced their ability to save for retirement, and only 28 percent of Americans describe themselves as consumer-debt free, EBRI found. Paying off debt frees up cash to use for other things, including saving. And paying off mortgage debt by retirement can completely eliminate one of your biggest monthly bills.

Educations costs. Higher education expenses often compete with retirement savings, especially when there isn't enough money coming in to cover both costs. Many people say they stopped saving for retirement to pay for their own (16 percent) or a child's (15 percent) education costs, HSBC found. And 5 percent of parents withdrew an average of $6,542 from their retirement accounts in 2012 to pay for college costs, according to a Sallie Mae and Ipsos survey of 800 parents of 18- to 24-year-old undergraduate students. Another 2 percent of parents took a retirement account loan averaging $4,357. While it's a worthy goal to help your children pay for college, it's risky to jeopardize your own retirement security to do so. "While some events might be unexpected, other major life events that disrupt retirement plans like starting a family and expensing a child's education can be better managed if properly planned for," says Ireland.

Retirement is far away. It's difficult to begin saving for retirement at your first job when you have so many more pressing needs, perhaps including paying down your student loan debt or saving for a down payment on a first home. However, the money you save in your 20s and 30s has the longest period of time to grow. Any money you tuck away at your first job and don't touch until retirement will compound and grow your net worth without you having to expend any additional effort. Some recent research suggests that picturing yourself in old age can help motivate you to save for retirement.