33% of Americans make a major mistake of money – Motley's madman

Retirement is a time of life that can cost money. It may not cost as much money as your years of work, but seniors still have bills to pay. And they need money to pay for them.

Unfortunately, 33% of Americans make no effort to build a retirement gulf, according to the KeyBank Financial Wellness Review, which brings together more than 35,000 American adults. Of course, saving insufficiently for retirement is one thing, but not fixing all money aside for the future. And if you are in the last camp, it's time to do better – before retirement announces and your lack of savings leaves you short of money and miserable.

Social security will not be enough

Many workers neglect their savings not intentionally, but because their limited earnings are absorbed by immediate bills, such as rent, transportation and medical care. However, other people do not make an effort to save because they expect a dramatic drop in their cost of living and assume that Social Security will provide them with sufficient income to cover them .

In fact, your living expenses at retirement should not go down too much. Of course, you will save on transportation costs and if you pay off your mortgage in time for your retirement, it's one less bill to worry about. But if you are a tenant, you will continue to pay for a roof over your head. And you will continue to face the many costs that workers face all the time, such as heating, electricity, food and clothing.

Social security, on the other hand, will only replace about 40% of your pre-retirement income if you earned an average salary, and most seniors need double that amount to stay in control of their bills. . To not save all money for retirement therefore means that you are jeopardizing your golden age.

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The solution? Increase your savings, even if it means starting to contribute gradually and increasing your pension contributions over time (for example, as your earnings increase). Or save a small amount each month, but do it regularly over a long period. Example: by reserving $ 100 per month for 45 years, you will earn $ 343,000 for your retirement, if you invest your savings with an average annual return of 7% (which is feasible if you are about to accumulate shares).

At the same time, improve the management of your money so you can save for retirement. Create a budget that allows you to control your expenses and reduce those that are not essential, such as recreation and restaurant dining.

Better yet, try to automate your retirement savings so that the money is transferred to a dedicated account from the start, then use your remaining earnings for short-term bills. You can do this by registering with your employer's 401 (k) plan, finding an IRA with an automatic transfer feature, and expecting money to be in this account every month.

Retirement is not cheap and it is certainly not free. If you want to take advantage of your golden age, make an effort to save money. Otherwise, you risk being stressed and unhappy after a lifetime of work.

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