Top Reasons People Don’t Plan for Retirement

Reasons for why some people do not plan appropriately for retirement are endless. Whether it is to pay off other debts or use funds toward other goals, a recent survey suggests that saving for retirement is just not a priority for an overwhelming share of adults.

In fact, retirement savings is not a main priority for 81% of working age people, according to those surveyed in an HCBS report released this month titled “The Future of Retirement: A balancing act.”

Based on an online poll conducted in August and September 2014, the HCBS survey reveals concerning figures of American workers’ saving habits and their views toward retirement planning.


Despite reporting a general concern for their retirement finances overall, many people surveyed said that paying off other debts prevent them from adequately preparing for a comfortable retirement.

Over half (51%) said that paying debts—excluding mortgages—is stopped them from preparing adequately, while 25% cited repaying their mortgage as a barrier.

Other priorities that took precedent over retirement preparations included saving for children’s education (8%), saving for a rainy day (8%) or a vacation (6%).

But even with the best intentions, major life events have taken their toll on over three quarters (76%) of pre-retirees’ retirement savings.

While some such events can be planned for, such as purchasing a home or paying a mortgage, unforeseen events like illness, divorce or losing a spouse can also have a profound impact on a person’s financial situation.

As such, nearly twice (33%) as many widowed or divorced retirees say their financial situation is worse than expected, compared with just one in five (18%) of those who are married.

Additionally, more than one in ten (14%) working age people faced an unexpected illness that prevented them or their spouse from working, with a “knock-on effect” on their retirement saving, says HCBS.

Even with the potential threat of having one’s financial situation derailed by the spontaneity of life, still a quarter of pre-retirees said they either are not currently saving for their retirement or do to intend to start.

“This is a concern, as over two in five (42%) retirees who did not prepare adequately for a comfortable retirement say that they did not realize that their preparation had fallen short until it was far too late, at or after they had fully retired,” HCBS said.

Written by Jason Oliva

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  • The title of this post implies it is about the reasons people do not plan their retirement from a financial perspective but the article is all about a lack of funding and does not address planning. Having a plan and funding retirement (with or without a specific plan) are two different things.

    It is this kind of misunderstanding and misstatement which confuse seniors. Planning and funding should be treated as two separate items not fused together as one.

    No matter what the situation of a person is, that person can have a retirement plan; however, funding that plan is difficult and will result in amending the plan as needed.

    The post is all about funding. Nothing was presented about how the funding problems were causing the individuals to tweak their retirement plans. Of course, reality is few retirees enter retirement with a realistic plan much less with a well funded one.

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