Why Many People Wait Too Long to Plan for Retirement

The retirement planning journey is filled with good intentions that often get derailed. Many people recognize they should be saving for retirement, yet they continue to put it off, sometimes year after year. Whether it's waiting for the "perfect time," believing they have plenty of time left, or feeling overwhelmed by the complexity of financial decisions, the tendency to delay is remarkably common.

The challenge is that waiting has real consequences. The longer you delay, the more difficult it becomes to catch up and the fewer options you may have later in life. Understanding the psychological reasons people procrastinate, the myths that keep them stuck, and the tangible cost of waiting can be the catalyst to finally take action.

Psychological Barriers to Retirement Planning

Human behavior around money is heavily influenced by psychology. Even smart, disciplined people can struggle to take the first step toward retirement planning.

Present bias and “I’ll start later”

One of the strongest forces is present bias, a tendency to prioritize today’s wants over tomorrow’s needs. Retirement may be decades away, while today’s expenses and pleasures feel immediate and concrete. It becomes easy to think, “I’ll start saving next year when things calm down,” and then repeat that same decision year after year.

Behavioral research consistently shows that when choices involve a trade-off between now and the future, people frequently choose the immediate benefit, even when the long-term outcome would clearly be better.¹ This bias is a major driver of procrastination in saving and investing.

Status quo, anxiety, and avoidance

Another subtle barrier is status quo bias, our preference for keeping things the way they are. Opening an account, selecting contribution amounts, and choosing investment options all require effort and decisions. Without a clear trigger, many people simply maintain their current habits, even if they know those habits are not moving them closer to their goals.²

Retirement planning can also trigger anxiety. Questions like “What if I don’t have enough?” or “What if the market crashes?” can feel overwhelming. For some, that anxiety leads to avoidance: not opening statements, not running the numbers, and not asking for guidance. Avoidance may reduce stress in the moment, but it increases long-term uncertainty and risk.

Loss aversion and fear of investing

People also tend to feel the pain of losses more than the pleasure of gains, a principle known as loss aversion.³ When market headlines are negative or account balances dip during downturns, that emotional discomfort can discourage people from starting or continuing to invest for retirement.

Over long time horizons, however, diversified long-term investors have historically seen growth despite market cycles. The key is that this potential growth depends heavily on time in the market, not attempts to time the market.

Common Myths That Delay Action

In addition to psychological barriers, several persistent myths keep many households from starting or fully engaging with their retirement planning.

Myth 1: “I have plenty of time to start later”

This myth underestimates the power of time. Consider a simple example using hypothetical numbers:

• Person A starts investing $5,000 per year at age 25 and earns a 7% average annual return until age 65.

• Person B waits until age 35 to invest the same $5,000 per year at the same hypothetical return.

  

By age 65, Person A could have just under $1 million while person B would have under $500,000. Even though Person B invested for 30 years, the time value of money gives Person A more than double the ending account value of Person B. The difference is not just the extra 10 years of contributions; it is the additional 10 years of growth on every earlier dollar. *

The core idea is that money invested earlier has more time to grow. Small, consistent contributions over a long period often matter more than large contributions over a short period.

Myth 2: “Social Security will cover my retirement”

Social Security is a crucial foundation of retirement income for many Americans, but it was designed as a supplement, not a complete retirement plan. The average benefit replaces only a portion of pre-retirement income for typical workers, which may not be enough to sustain the lifestyle many people envision.

In addition, projections show that without legislative changes, Social Security’s trust fund faces long-term funding challenges, which could result in reduced benefits in the future if no action is taken.⁴ While benefits are still expected to be paid, depending solely on them introduces significant uncertainty.

Myth 3: “I need a large lump sum to get started”

Some people believe they need tens of thousands of dollars to begin retirement planning. This misconception prevents them from starting at all. In reality, small, consistent contributions can grow significantly over time. Contributing $200 monthly starting in your 20s can grow into a substantial nest egg by retirement through compound growth. The key is consistency and time, not the size of initial contributions.

Myth 4: “I’ll just work longer to make up for it”

While working longer can help improve retirement readiness, this strategy isn't as reliable as people hope. Life doesn't always cooperate with our plans. Health issues, caregiving responsibilities, job loss, or workplace stress may force an earlier retirement than anticipated. If you've relied on working longer as your primary retirement strategy and circumstances change, you may find yourself unprepared.

Myth 5: “My employer’s retirement plan is all I need”

Employer-sponsored retirement plans, such as 401(k)s or 403(b)s, are powerful tools and often a key pillar of retirement planning. However, they’re usually one piece of a broader strategy that can also include individual retirement accounts, personal savings and, for some, other income sources.

Relying solely on a workplace plan can be limiting if contribution levels are too low, if you change jobs frequently and leave accounts scattered, or if your overall plan is not aligned with your retirement goals.

The Cost of Waiting Too Long

Delaying retirement planning has both visible and hidden costs that can affect your future lifestyle and choices.

Lost growth and higher required contributions

The most obvious cost is the potential growth you miss. When you start later, each dollar has fewer years to potentially grow. To reach the same retirement target, late starters typically need to contribute significantly more each month than those who began earlier.

This can create real strain. Instead of spreading contributions across 30 or 40 years, you may be trying to compress your savings effort into the last 10 to 15 years before retirement, when you may also be balancing college costs, mortgage payments, or support for aging parents.

Reduced flexibility and more financial stress

Waiting can also reduce your flexibility:

• You may have less ability to adjust contributions up or down without impacting your lifestyle.

• You may feel pressure to remain in the workforce longer than you’d like.

• You may have less room to navigate market downturns or unexpected expenses.

  
  

All of this can increase stress at a time when many people are hoping to gain more control and calm in their financial lives.

Health care and longevity risk

Healthcare is one of the most significant and unpredictable expenses in retirement. Studies have found that higher expected out-of-pocket health care costs are associated with delayed retirement, as some individuals feel compelled to keep working to maintain coverage or income. ⁵

At the same time, people are living longer on average, which means retirement savings often need to last for several decades. The combination of rising healthcare costs and longer life expectancies makes early planning even more important.

Why Starting Earlier Creates More Flexibility

The single greatest advantage of early planning is flexibility. Starting now, whatever your age, creates options that can be hard to reclaim later.

Control over your retirement timeline

When you build savings steadily over time, you’re more likely to choose when and how you retire, rather than having that decision made for you by circumstances. Whether you want to fully retire, scale back to part-time work, or transition into a second career, having a strong financial foundation gives you more freedom.

Capacity to handle surprises

Life doesn’t follow a straight line. Health events, job changes, economic downturns, and family needs can all arise unexpectedly. A solid retirement plan, built over many years, acts as a financial shock absorber. Even if you face an unplanned early retirement or reduced income, prior planning helps cushion the impact.

More room to adjust your approach

By starting earlier, you give yourself time to:

• Increase contributions gradually as your income grows.

• Review and adjust your overall strategy every few years.

• Course-correct if you’re not yet on track to meet your goals.

  
  

Making adjustments in your 40s or 50s, when you’ve already built a base of savings, is generally much easier than trying to make up decades of missed saving in a very short window.

Better use of tax-advantaged accounts

Tax-advantaged retirement accounts, such as 401(k)s, 403(b)s, traditional IRAs, and Roth IRAs, can be powerful tools. The earlier you begin using these accounts, the more years your money has to potentially grow without current taxation on earnings (or tax-free in retirement, depending on the account type and your situation).

Over time, this tax efficiency can make a meaningful difference in how much of your savings you ultimately keep and spend in retirement.

Greater Confidence

Finally, there is a psychological benefit: greater confidence with your investments. Knowing that you have a plan, that you’ve started, and that you’re making progress can reduce anxiety about the future. Instead of worrying about “someday,” you can focus on living today while knowing you are taking concrete steps toward your long-term financial independence.

Taking Action Today

The most important step in retirement planning is getting started. Even small, automatic contributions can help you overcome inertia and harness the power of time.

A few practical steps to consider:

• Review your current savings and approximate retirement needs.

• Enroll in or revisit your employer-sponsored plan and consider setting up or increasing automatic contributions.

• Explore whether additional retirement accounts, such as IRAs, may fit your situation.

• Set a reminder to revisit your plan periodically, rather than letting it drift out of sight.

  
  

If you feel unsure about where to begin or whether you are on track, you don’t have to figure it out alone. A conversation with a financial professional can help you clarify your goals, understand your options, and build a plan that fits your life and priorities.

If you’d like to talk through your retirement planning, our team is available for a no-obligation consultation to help you evaluate where you stand and what next steps might make sense for you. Taking that first step now can help give your future self more options, more confidence, and more control.

Contact Us

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* This is a hypothetical example and is not representative of any specific situation.

Your results will vary. The hypothetical rates of return used do not reflect the

deduction of fees and charges inherent to investing.

¹ Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica.

² Appleton Partners, “Breaking Through Behavioral Barriers in Personal Financial Planning,” 2024.​

³ Kahneman & Tversky, Prospect Theory, 1979.

⁴ Social Security Trustees Report (most recent available).​

⁵ Urban Institute, Do Out-of-Pocket Health Care Costs Delay Retirement?