7 Excuses People Use to Justify Not Contributing to Retirement

Excuses You Are Using to Stop Contributing to Retirement

David Franklin/E+/Getty Images

The sooner you start saving for retirement, the better off you will be in the long run. Too many people in their twenties have a difficult time putting money away for retirement. It needs to become a priority  You cannot rely solely on Social Security to fund your retirement. Here are seven common excuses and the solutions for the problem. 

No Retirement Plan at My Job

Are you ready to move onto a new job?. skynesher/Vetta/Getty Images

If you are working for a smaller company or as a contractor, you may not be offered a retirement plan. This can be discouraging because signing up retirement is a lot easier if you do not have to find your own account. Additionally many employers will offer a match to a percentage of your contributions. You may also have to wait a year to start contributing to retirement at your job.


You do not need to rely on your employer to start saving for retirement. One simple solution is to open an IRA at a brokerage firm. This gives you more control over your retirement savings. Many investment firms will also waive the initial investment amount if you plan on making monthly contributions to the account. This can help you start saving right away. If you are self-employed, you should also check out the accounts that are designed specifically for you.

This Is Just a Temporary Job

Small Transactions
Luis Alvarez/Getty Images

You may be working a job as a contractor or temporarily while you look for a better job. You may balk at the idea of contributing to retirement since you will not be fully vested in the account before you leave. However, it is important to remember that any money that you put into your retirement account will go with when you leave.


Start saving either through the 401(k) or similar plan offered by your employer or into an IRA. When you leave your job, you can roll the money in your 401(k) into your IRA so that you have more control over your retirement. The sooner you may saving for retirement a priority, the better off you will be. Many people end up working primarily at temporary jobs or end up loving the job and staying and then they forget to change their retirement contributions.

I Have Too Much Debt

What is the difference between secured and unsecured debt?
Martin Poole.DigitalVision/Getty Images

It does not make a lot of sense to put a lot of money into investments when you are carrying debt that costs more than you are earning in interest. However, retirement contributions may be the exception to this rule. If it is going to take you a few years to get out of debt, you need to think about how much you are going to lose if you are not contributing to retirement.


If your employer offers an employer’s match, then you need to contribute up to that percentage. This is basically free money for your retirement account, and you should take advantage of it. Otherwise look at how long it will take you to get out of debt and then determine the amount you will contribute until you are debt free. It may be five percent, or it may be two percent. Contributing some money to retirement will not affect your take home pay as much as you might think. Once you are debt free you should start working up to saving up to fifteen percent of your income for retirement. 

I Can Save for Retirement Later -- It Is Years Away

Purestock/Getty Images

This is a common excuse, and when you are in your twenties, retirement is more than forty years away. It can feel like you have forever until you retirement, but if you start saving when you are young, you will need to put less of your total income away.


Start contributing right away, and slowly increase your contributions as you get raises. If you want to retire early, it is important to have a plan in place. If you want to retire before you are 59, you will need to have investment accounts in addition to your 401(k) and IRA. Eventually you will get to a point where the interest you are earning each month are more than your contributions and that is when wealth will really begin to grow. 

I'll Start Saving Once I Have Paid Off My Student Loans

Is your student loan breaking the bank? Learn how much it's actually costing you.
Peter Dazeley/Photographer's Choice/Getty Images

Many college students are graduating with massive amounts of student loan debt. This can be crippling as they struggle to make ends meet and their monthly payment. However, it can be devastating to their retirement savings as well.


If you find yourself in this situation, be sure to contribute up to your employer’s match. This will allow you to take advantage of the free money for retirement. You should try to contribute a monthly percentage so that you can rest easy knowing that your future will not be too affected by your student loans. You can also see if you qualify for income based repayment options that can make your student loans more manageable. 

I'm Still in College

College Student Financial Checklist
Hero Images/Getty Images

If you are still in college, you may not be sure if you should be contributing to retirement or not. It is difficult because you have not yet reached the point where you earn a lot of money. You may be borrowing money to pay for school.


In this situation, it does not make sense to focus on saving for retirement. Instead, you should be working to reduce the amount that you borrow as much as possible. However, if you are a grad student that is working and attending school, you may want to continue contributing to retirement if you keep your full-time job. 

I Barely Make Enough to Get By and I Can't Find Any Money to Save for Retirement

Antonio Martin Sotelo/Moment/Getty Images

There may be a situation where you do not feel like you make enough money to cover your expenses and you wonder how you can afford to put anything into your retirement account. If you are going into debt each month to put food on the table, it can be discouraging and difficult to think of the future.


Although it may seem like you do not have the money available to put toward retirement each month, you may be surprised at  how little saving for retirement actually affects your paycheck. It can also reduce your taxable income, which reduces the amount that you pay in taxes. You can use a paycheck estimator to see how much the retirement contributions affect your paycheck and find the amount that allows you to start contributing. You may also want to make sure you are living on a bare bones budget if you are in this situation.