If you would rather scrub your toilet than plan for retirement, you're not alone. A recent study from the ING Retirement Research Institute, "Shining a New Light on Retirement," found that nearly a third of pre-retirees consider cleaning their bathrooms or paying bills more pleasant than figuring out how to save for their golden years.
But this type of procrastination could really cost you, says Lynne Ford, CEO of ING Individual Retirement.
If you delay your retirement plan by just five years, you could lose tens of thousands of dollars in savings, she says. For example, consider a 40-year-old worker who makes $60,000 annually. That person invests 6 percent of his income each year in a tax-advantaged investment or savings account which earns 4 percent in annual interest until the worker retires at age 65.
If this worker procrastinated and waited until age 45 to start the same savings plan, he would have about $47,000 less upon retirement--approximately $119,000 instead of $166,000. "There is definitely a benefit to starting early," Ford says.
Overcoming retirement planning anxiety
No one sets out to lose out on almost $50,000, but people often don't start retirement planning because they feel overwhelmed and don't know the first step to take, Ford says. The way to overcome this anxiety, she advises, is to develop a simple savings road map that can be managed on a monthly basis as part of your regular budget.
"If you think about a 30-year career and know there are 12 months in a year, that's 360 months of executing against your retirement plan in some systematic way," says Ford.
4 steps to an on-track retirement
Had enough of the procrastination anxiety? You owe it to yourself to do some realistic retirement planning now. It's time to put away the toilet scrubber and pull out the pen and paper (or fire up the computer). Here are four simple steps to get your retirement on track:
- Identify your savings target
- Enroll in tax-advantaged investment and savings programs
- Consolidate retirement accounts
- Redefine retirement
Thinking seriously about your retirement may not be the most fun item at the top of your list, but building up a robust retirement savings account will give you peace of mind that will last far longer than a clean bathroom.
The original article can be found at Money-Rates.com:How cleaning your bathroom can cost you $47,000