Why Do Americans Save More for Vacation Than for Retirement?
Memorial Day is the unofficial start of summer, when people start planning their vacations—a family reunion, a camping trip, a week at the beach. Americans like their vacations so much that they are three times more likely to save for a short-term expense like a vacation than they are to save over the long-term for a comfortable retirement.
According to the fourth annual TIAA-CREF IRA Survey, short-term savings for a vacation topped the priority list for 24% of survey respondents, while a mere 8% put retirement savings first. People know that retirement saving is important—71% of survey respondents have an IRA, but 30% of them aren’t making any contributions. Why?
Here are four reasons people give for not saving for the future:
- I’m young. I want to enjoy life. There’s no reason you can’t enjoy life now and later. It may be hard to imagine yourself as an 80-year-old, but chances are you’ll get there. Choosing to cook at home instead of dining out and contributing that cash you saved into an IRA can pay off in many more steak dinners later on.
- Saving is hard. Saving is a discipline, like going to the gym or getting to work on time. You can start small to develop the habit—ride your bike to work once a week. Or consider making a budget that includes retirement saving as a recurring item, right along with your electricity or mobile phone bill.
- I don’t know what I would invest in. There are lots of reliable investor education materials available to you online (see list below), or you can consult with a financial professional. The more financial education you get, the better prepared you’ll be for retirement planning and all of the other financial decisions you’ll be making in your lifetime.
- I don’t know how to get started. That’s the easiest part of all. Just contact The Entrust Group for a free consultation.
Here at The Entrust Group, we enjoy our vacations as much as the next person, but we’re also here to help you save over the longer term. Contact us today.
Selected Investor Education Resources
Financial Literacy and Education Commission
Investor Protection Trust
Securities & Exchange Commission