Why you can’t save for retirement part 2
Why you can’t save for retirement part 2? Find out here on this episode. Then download your FREE Queer Money Kickstarter, a 9-step Guide to Kickstart Your Journey to Financial Independence.
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Why you can’t save for retirement part 2?
On this Queer Money®, we’re sharing why you can’t save for retirement part 2. We are giving you just a few reasons why it’s so damn hard to save for retirement. Last week, we discussed external, systemic forces making retirement savings so hard. We are not totally innocent and will dive deeper into looking within ourselves.
The first reason why you can’t save for retirement is our community, especially when it comes to gay men, has a carpe diem mentality in part because this is what trained our community to live that way during the HIV/AIDS crisis. Many of us in the community were living for today because we didn’t know if we would live next week, next month, or even next year. Many people said we will spend all our money, and we know stories of individuals who took out their 401k’s, cashed out of life insurance policies, and lived it up. However, most of those people are still living and many of those people are not living with HIV or AIDS.
The second reason you can’t save for retirement is hyperbolic discounting. Retirement feels like a distant relative until it knocks on your door like an overly enthusiastic neighbor. Eighty to 100 years feels like forever when you are in your twenties, but it is a lot closer than we think.
The third reason you can’t save for retirement is that many of us feel like deer in the headlights. Money feels hard and scary, and it is easier to do nothing than to take action. We tend to “yeah, whatever” situations where sticking with our default or current sitch doesn’t immediately hurt us. Unfortunately, that can keep us from making even small decisions that would help us big time in the near future.
The fourth reason why you can’t save for retirement is we underestimate how long it will take to truly save for retirement. According to the Journal of Accountancy, 54% underestimate how much money they need to retire. Not only do we wait forever to save for retirement because it is so far away, but we underestimate how much we will need in retirement and how hard it will be to save and invest to have that retirement. Most Gen Z and Millenials believe having only $500k saved for retirement is enough. However, a one-year stay in a nursing home costs about $108k, and you will burn through the $500k quickly. It might be a good idea to have these conversations. What kind of lifestyle do you want in retirement? What will it take to get there?
One of our biggest roadblocks is the fifth reason we can’t save for retirement: we live in a consumption society. Everyone celebrates you spending your money because it is an outward display of living a good life. Buying new shoes, a new home, a new car. Whether you can afford it or not, it is an outward display of living a good life. No one is celebrating that your 401K balance went above $100k or above $250K or above a million. These are the types of things that we want to encourage more folks to talk about and those other things. Let’s celebrate the money wins that each of us has.
We will share some practical steps for saving for retirement next week. We want to know where you’re at in retirement planning, what is holding you back from financial security, and how we can help you specifically.
What personal reasons, things do you have control over in your everyday life, are keeping you from saving for retirement?
For the resources and to connect with our guests, get the show notes at: https://queermoneypodcast.com/subscribe.
Previous Bonus Podcast Episodes
- Why Gays Can’t Save for Retirement Part 1
- How This Gay Couple Is Winning at Retirement
- Are Gays Losing at Retirement?
Click below to listen to this bonus episode.