Can You Afford A 401K With Limited Income?

People know that investing in a 401K is the right thing to do for their future.The collapse of social security is imminent as the government continues to borrow from the program for things other than a citizen's retirement.There is no way that someone doesn't know that he or she needs to invest in his or her retirement.It is an implausible possibility, but just in case you haven't heard, it is important to invest your money so that you can retire when you want to.

That being said, most people do not have the finances to invest in their futures.Car payments, house payments, health care insurance and college loan payments can all drain money from an income that is supposed to sustain a person not only during his or her working years, but also when he or she retires.
Many companies are cutting the retirement benefits out of their employee's package entirely while also increasing the employees' burden in health insurance.While profits soar for a few well-positioned companies, every business is looking to increase the profit margin and cutting benefits is an easy way to reduce costs.
Not only does this leave some people without a retirement program entirely, it also leaves them without the ability to fund their own retirement programs.What good does it do to know that you have to save for something when you do not have the means to do so?It is like telling someone who makes $100 a month that they have to pay for a health care plan.Clearly having health insurance is a good thing, and many of us would become bankrupt if we experienced something as simple as a broken leg without it.However, it just isn't realistic for someone to choose health care over a place to stay or food to eat.
401K investing falls in the same category.No one wants to reach his or her golden years and not be able to retire.Worse no one wants to reach that age, not be able to retire but be forced out of the job anyway because of age or disability and still not have enough money to live on.The United States has a terrible record of taking care of the elderly, especially those who do not have family or money to take care of themselves.
So what can people do to be able to retire in relative comfort?The advice is the same as you heard before and maybe just a little harsher.Yes, not drinking a latte every day and putting that into an interest bearing account is one suggestion - $30 a month on the low side, adds up to $360 a year, but even over the course of ten years, that works out to about $3600 and the pittance that most 410Ks pay as far as interest goes really isn't worth talking about anymore.
Reduce on a big scale.How many rooms do you really need in your house?If you are not upside down in your mortgage, consider moving into a smaller, energy efficient home.Driving a big truck, move down into a fuel efficient car - not only will the payments be less, the payments at the pump will also be less.
But the big thing is that when you save money, rather than counting it as saved, count it as spent and put it immediately into the retirement account.Then when it is there, do not touch it for any reason.In today's economy, which is easier said than done, but discipline will help make the later years more enjoyable.