Are You Basing Your Retirement on Wrong Assumptions?

Back in the good ol’ days, as my grandfather used to say, your employer offered a pension plan as a perk for working for them. Based on your salary and how long you’d been there, your company put away money for your retirement. You just had to show up, do your job well, stay loyal to the company, and you’d get a pension check every month when you retired. You didn’t have to worry about retirement.

Those days are gone.

Unfortunately, most people are still living like they’ll get a great pension when they retire. That’s a bad assumption! They’re living paycheck to paycheck and not putting any money away for retirement. They may also assume a Social Security check plus a pension will be enough. It won’t! That’s another bad assumption. Here’s your wake-up call: You have to fund your own retirement! If you don’t put any money aside for retirement, you won’t have any money when you retire.

You can’t ignore the fact that you will retire someday. Whether you want to or not, you will! You can’t assume the government will rescue you. It won’t! That means you need to get serious about your retirement. You need to take action so you can retire with dignity and peace of mind. Here are a few steps to take:

1. Be Allergic to Debt

It’s retirement quicksand. Those credit card bills and car payments will keep you from living your dream retirement. Use the debt snowball and get rid of your debt—NOW!

Related: The One Mistake That Could Destroy Your Retirement

2. Take Control of Your Money

Yes, that means the dreaded B-word—Budget. You have to be intentional about where your money goes, or it won’t ever go toward retirement. You’ll look back at all those years of work and wonder why you have nothing to show for them.

Related: Budget for the Important (Not the Urgent)

3. Trim Your Lifestyle

That may mean drinking office coffee instead of stopping by that fancy café. It may mean doing a staycation instead of a fancy trip overseas. It may mean renting a movie instead of forking over the big bucks to watch it in a theater.

4. Keep Your Focus

If you don’t stay intentional, you’ll begin to let little things slip here and there. A splurge here. A credit card purchase there. And before you know it, you’re back where you started. Stay on guard! Don’t celebrate a $400 raise with a $600 car payment!

5. Don’t Assume You Can Retire at a Magic Age

If you turn 67 and can’t live off of what you’ve saved, then guess what . . . you don’t get to retire! You’ll have to keep working. The good news, though, is that if you hold off retirement until age 70, you will increase your payout to a maximum of 124%! Not many people are aware of this benefit. Three years earns you free money!

Getting your retirement fund into shape is like trying to get your body into shape. You make the decision to take steps every day to take care of your body, and over time, those choices add up to a slimmer, healthier you. The same applies to retirement savings. You take steps every day—eating in, buying used cars, saying good-bye to the Joneses—and over time, you’ll discover that your retirement fund is taking shape!

This is your retirement wake up call! Don’t base your future on assumptions. Learn about these topics and more in Chris Hogan’s book Retire Inspired.