Why You’re Not Ready for Retirement

Here are some ways to know if you’re ready for retirement and what to do if you’re not.

According to GoBankingRates, 56% of Americans have less than $10,000 saved for retirement.  Considering the dismal news about Americans and our retirement accounts, it’s probably a good idea to assess where you stand today and what you can do so that you don’t find yourself approaching retirement without the income you will need to support you.

You Haven’t Planned For It

The one thing that everyone has in common regardless of socioeconomic status, lifestyle, age, gender or color is that everyone needs money in retirement.

If you’re worried that you won’t have enough saved when you retire, you’re not alone. According to Statistic Brain*, 80% of Americans feel the same way.

But even though people are worried they won’t have enough or know that they won’t have enough, they still aren’t saving. We also know from the research that 38% of us do nothing at all in the way of retirement planning (aka saving), and there’s a considerable amount of inaction to secure a comfortable financial future in retirement.

A financial advisor can help you tackle your retirement planning needs. Even if you’re older, it’s better to do something than nothing at all. If you’re in your 20’s and early 30’s, make sure you start good savings behaviors now.

You’re Still Not Saving

No matter what, you should be saving something toward your retirement if you aren’t already. Despite the forecast that about 75% of Americans over 40 are behind on saving for retirement, people still aren’t making necessary changes. The one thing we can guarantee as financial advisors is if you’re not saving toward retirement, you are definitely not going to be ready to retire anytime soon.

Fortunately, there are a few retirement vehicles that the IRS allows catch-up contributions for and they are:

  • 401(k)
  • 403(b)
  • 457(b)
  • IRA (traditional or Roth)

These are tax-advantaged retirement savings accounts that you contribute to and with time, your money grows tax-free.

While there are contribution limits for any of these mentioned accounts, people over a certain age who have not save enough for retirement have their contribution limits raised. This allows people nearing retirement try to catch up as best they can as quickly draw near to retirement. You can review the catch-up contribution limits on the IRS website here.

You’re Dependent on Social Security

Social Security was never intended to fully support retirement needs. Instead, Social Security should be used to supplement your retirement income. If you think that Social Security will be enough to float you through retirement, you are not ready.


*Retirement Statistics. Statistic Brain. Retrieved 8/13/2016 from http://www.statisticbrain.com/retirement-statistics/

** Retirement Topics – Catch-Up Contributions.. Internal Revenue Service. Retrieved 8/12/2016 from https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions



Corey Purkat

Corey Purkat, CFP®, AIF® is the Founder & CEO of Northwoods Fiduciary Advisors, a ​fee-only RIA ​that specializes in working with small business 401(k) plans and is
located in St. Paul​, Minnesota.

Corey and I became friends through NAPFA and I asked him to write some thoughts on “Why You’re Not Ready for Retirement” as a guest topic for this site.