In 2010, 43% of Australian workers had less than $10,000 in retirement savings. People are claiming to have logical reasons for not having enough retirement savings. There are some that say they are still paying off personal debts with high interest rates; others say that they are dealing with mortgage or the kids are still in college. There isn’t any limit to what reasons they claim to have.
No matter how logical they may seem, it is still simply procrastination.
Procrastination kills time and time is the most critical factor in retirement planning. You can’t build wealth in just savings alone but through savings compounded over time.
Below are ways to overcome retirement planning procrastination which is relative to its causative factors?
Procrastination is caused by 3 psychological factors:
- Fear
- Disorganization
- Perfectionism
Fear
People are putting off their retirement savings plan because of fear for immediate discomfort. Our present fear often consumes us that we tend to delay dealing with the things concerning the future. We don’t realize our delays may cause scarier predicaments than our present fears.
Money coaches say that if you contribute $2,000 to your retirement savings annually for 9 consecutive years and let it compound for 41 years, you’ll get approximately the same amount if you waited 9 years to begin saving and contribute $2,000 yearly for 41 consecutive years? If you’re afraid to commit $2,000 dollars per year of your budget to retirement savings for just 9 years, how can you commit to save $2,000 per year for 41 years? The latter is definitely more terrifying.
To overcome your present fear, enhance your perception of the future pain to make the present inconveniences more bearable.
Disorganization
Organizational skills such as careful planning and budgeting are needed in retirement planning. In short, retirement planning is a very complicated thing to deal with. People often deal with complicated tasks in delay or avoidance, so they always end up procrastinating in their retirement savings plan.
The best way to solve this problem is to take small incremental steps in eliminating the clutter from your finances. Create a money log where you can jot down all the comings and goings of your money. This is a good way to organize your finances because this will show you your total monthly income and expenses where you can base your budget on.
The best way to be able to control your expenses completely is to make a budget. Budgeting will significantly reduce your risk for overspending and increase your chances of saving.
Perfectionism
Perfectionism is characterized by: an attitude of avoiding doing something unless it can be done perfectly and; by a great need to finish a current task before starting doing another. In relation to retirement planning, perfectionism makes people procrastinate because they’re still either figuring out the perfect way to do something or they are still busy perfecting their current lifestyles, they can’t seem to start preparing for their future.
If you are a perfectionist, start your retirement savings plan by setting your savings in auto-pilot. Arrange a percentage of your finances to be automatically pulled into your savings account. This technique will save you the effort and you can focus all your attention in perfecting your current task while your savings increase automatically.
If you follow the steps above you will be able to stop procrastination in your retirement planning. Time is the secret to wealth building so don’t delay anymore and start saving now.
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