5 Mistakes That Can Lengthen the Road to Retirement

For many people, their retirement account balance is a sobering reminder that good intentions don't always lead to good outcomes.

- Lisa Rabasca Roepe

Perhaps you intended to increase your retirement savings each year, but you instead upgraded to a nicer car when you were promoted. Or you charged family vacations to your credit card but never paid them off. Maybe you borrowed from your account to pay for home repairs because you didn't have an emergency fund.

The result: Instead of the recommended six times your annual salary in a retirement fund by age 50, you have less than US$100,000 (S$128,000) and fewer than 20 years to finance what could be a decades-long retirement.

In fact, nearly 60 per cent of savers worry that they aren't putting aside enough money, according to a 2024 Bankrate study. And about one-quarter of US adults over the age of 50 who are not yet retired said they would never be able to.

While 73 per cent of private-sector and state and local government employees have access to an employer-sponsored retirement plan, just 56 per cent participate, according to the US Bureau of Labour Statistics. And many people who do take part sometimes cut back or stop their contributions to offset inflation and unexpected expenses or when there is uncertainty in the markets.

Experts have identified five common habits that sabotage retirement savings, all stemming from our tendency to choose immediate gratification. Here's a closer look at these money missteps and practical strategies to overcome them.

Increasing Your Spending
As we make more, we tend to spend more, as our perception of our wealth changes: We think we have more than we do.