How to overcome one of the biggest retirement hurdles
Dhara Singh
Stifling debt is keeping many American workers from saving for retirement. But it’s still possible to meet both obligations, personal finance experts say.
One in 3 employees who don’t contribute to their workplace retirement say it’s because they have too much debt, according to a survey this year by Natixis Investment Managers. More than 2 in 5 workers said general credit card debt hampered their retirement savings, while over a quarter of millennials cited student loans.
But delaying contributions – no matter the reason – hurts your long-term financial security in your golden years.
David Edwards, president of Heron Wealth in New York, encourages people to contribute at least a small amount to your retirement plan each month, even if they have debt.
“Our younger clients face this issue all the time,” Edwards said. “Start with a 1% contribution. And every time you get a raise, increase your contribution rate by another 1%.”
By not contributing to your 401(k), you forfeit your employer’s match – if one is offered – and essentially leave money on the table. In fact, a company match is a huge incentive to get workers to contribute to their 401(k)s in the first place, according to the Natixis study.