Frequently it's not lack of funds, but rather lack
of perspective that keeps young employees from opting into retirement accounts,
says Dan DeKeizer, a vice president
and actuary in MetLife's Retirement Strategies Group. "What I see right in front of me always feels more
important than something that's a long time away," he says. "Being able
to live a desirable lifestyle in retirement doesn't compare to immediate
things like paying a student loan, buying a house, getting married."
Understanding that putting money away now translates to bigger, better luxuries later is difficult for someone pinching pennies on an entry-level salary. Danialle Foy, a 29-year-old administrative assistant in Chicago, says that she stays motivated in her savings plan by calculating the earnings her retirement account will likely gain in the next 40 years as well as how much money her household is saving by eliminating credit card debt.
"On our credit cards alone, we've paid almost $4,000
in actual debt, but we've also saved about $6,000 in interest," Foy says.
"When we've paid off all of our cards, that extra money will go straight
to retirement. When you do the math, you can see how much money you're saving
and you feel like you're making progress."
Track your own progress on Bankrate's retirement calculator to see how your money can multiply over the years. Bankrate's debt payoff calculator reveals how much you can save by paying debt off early.