Procrastination is a common behavior. I have been guilty of it, and you probably have been, as well. I get a head start on some things and finish early; others I tend to put off until I must scramble to finish them quickly. Have you ever wondered why we do that?
Many psychological, emotional, and situational factors contribute to procrastination. Some factors include lack of motivation, fear of failure, low self-esteem, being overwhelmed, distraction, lack of consequences, and perfectionism. Whatever the reason, procrastination
can impact many areas of life, including
retirement savings.
Some put off saving because they don’t have large amounts to contribute. They think, “This small amount is not going to make much difference, so I will just wait until I have more.” The problem is, some people never get around to saving for retirement. So, should we start saving if we only have a little to contribute?
Start saving for retirement even if you can only save a little at first. While it’s ideal to save a substantial portion of your income for retirement, it’s not always feasible, especially when just starting a career or facing financial constraints or debt. However, it is crucial to establish a habit of saving and to get into the mindset of saving for the future. Consider several reasons why it’s important to begin saving for retirement:
The power of compounding: The earlier you start saving, the more time your money can grow through compound interest. Small contributions made consistently over a long period add up significantly.
Good financial habits: Starting to save, even limited amounts, helps you establish the habit of saving for the future. As your income grows, you can increase your contributions.
Tax advantages: Some retirement savings accounts, like IRAs and 401(k)s, offer tax benefits. By contributing, you may become eligible for tax deductions or tax-free growth on your savings.
Employer matching: If your employer offers a retirement savings plan with a matching contribution, you’re essentially getting “free” money from your employer. Take full advantage of their generosity.
Flexibility later: As your financial situation improves, increase your retirement savings contributions. Starting early with small amounts prepares you to adapt to your changing circumstances.
If you have limited savings potential, don’t let that deter you from preparing for your financial future. Start right where you are. To make the most of limited savings:
Set specific savings goals.
Create a budget that includes a modest allocation for retirement savings.
Automate your contributions through payroll deduction or bank draft.
Reassess your budget and retirement goals as your income and financial situation evolve.
It’s never too early to start saving for retirement! Even small contributions make a meaningful difference over time. The key is consistency. Even if you save only a small percentage of your income, the discipline of saving is invaluable. Over time, you can increase your contributions as your income and financial stability improve. Why not take the most important step and start?
About the Writer: Chris Compton is accounting administrator for the Board of Retirement. He graduated in 2007 with an M.A. in Bible exposition from Columbia International University. A 1998 graduate of East Tennessee State University, he has over 18 years of administrative and financial experience in varied fields, along with seven years in pastoral ministry.
