According to Employee Benefit Advisor, Generation X is currently most at risk for financial hardship in retirement. PricewaterhouseCoopers released results of an employee financial wellness study this week and found of employees in the generation born in the early ’60s through early ’80s say they’re likely to tap into their retirement savings. In fact, 30% of them admit to already having withdrawn from a retirement account.
Here are a few tips to help minimize your temptation to break into those savings:
College Loans – While your child’s education is a very important fund, it should not be made possible from your retirement savings. There are other ways to find funding for education through loans, scholarships and financial aid but you have to remember there is no alternative to retirement. Instead of reacting to the here and now, remember there is a future to be mindful of.
Vacations – Many couples make the mistake of using retirement savings for a trip prior to retirement. While traveling should be something to have included in retirement, it won’t be possible if you’re spending the money before you retire! Try to cut out this habit by going on vacations that fit into your budget now (check out our previous blogs about traveling cheaply!) so they won’t take away from your lifestyle in the future.
Mentally Purchase – When you know there’s a large expense coming up, plan accordingly. Cut down on eating out for a month to save up the cash you’d like to have for the purchase. A lot of families (especially around Christmas time) start dipping into retirement to fluff up the festivities. If you plan far enough ahead, you can have both your desired item and keep out of the retirement fund.
Don’t let an impulsive present get in the way of a happy future. A retirement fund should be used for sailing in the BVI’s, road tripping cross country with the grandkids, or touring wine vineyards in Italy. So keep that in mind the next time you want to dip into those savings!