4 Problems You Could Face if You Don't Save Enough for Retirement

When you have bills to pay right now, it's tempting to put your retirement savings on the back burner. After all, retirement could be decades down the road. You have plenty of time to figure it out.

Except many people who take this approach don't figure it out. Retirement-age Americans (those 65 and older) make a median income of $50,290 per year, according to retirement income research by The Motley Fool. There's just one problem: They spend an average of $57,818 per year.

One of the reasons people put off saving for retirement is that there aren't immediate consequences. But it can cause serious problems, like the four discussed below, once you're ready to retire.

1. Being forced to downsize your home

Retirees who can't make ends meet sometimes find that the best option is getting a cheaper home. If you're renting or paying off a mortgage, housing is likely one of your biggest monthly expenses. Reducing that could be your only option to make your budget work.

If you've paid off your house, then it may be your largest asset. But you can't just tap into that like a withdrawal from a savings account. If you want to make use of that money because you don't have enough in your retirement savings, you'll need to sell your home and buy or rent a more affordable place.

Plenty of retirees downsize because they don't need as much space as before. But it's stressful to be forced into it, especially if you're attached to your current home.

2. Needing to work longer than you want

Most of us don't want to work forever. Once people get into their 70s and 80s, they usually feel like winding down. Or running for President of the United States. This is a strange time to be alive.

For everyone who wants to retire at a normal age, you can start receiving Social Security at 62. But you need to wait until your full retirement age (currently 67, for those born in 1960 or later) to get the maximum benefit amount.

Social Security only takes you so far. For the average worker, it replaces about 40% of pre-retirement income. If you don't have enough in your retirement savings to make up the difference, you may need to keep working until you do.

3. Relying on loved ones for financial support

If you have a good relationship with your parents, and you see them struggling with money in retirement, you'll probably want to help them. And if you have a hard time financially in retirement, your kids will likely want to do the same.

There's nothing wrong with families helping each other. In many cultures, it's the norm. But it's important to realize that your loved ones may feel responsible for helping you if you need it. If you don't want that, then you'll need to make sure you can fully support yourself in retirement.

Parents, in particular, sometimes end up not saving enough for retirement because they prioritize college funds for their kids. It seems like the right thing to do -- making sacrifices for your children. But you need to take care of your own needs, too. There are plenty of ways to pay for college. There aren't retirement loans for seniors who haven't saved enough.

4. Not being able to have the experiences you want

People often have big plans for their retirement. Get an RV and see all the national parks. Hop on a plane and travel the world. Spend every major holiday with your family. There's a lot you can do, and with no job taking up your time, you have the freedom to do it.

It'd be a shame to work your entire life, only to not be able to do the things you want in retirement. But if you're barely getting by on your retirement income, that could be what happens. It's hard to travel the world when you're just focused on making it to the next month.

How to save enough for retirement

The best way to save for retirement is to make it automatic. First, open retirement accounts. If your employer offers a 401(k), that's a great place to start. You can also open an individual retirement account (IRA). Both of these accounts allow you to invest in stocks and investment funds that can help grow your retirement savings.

Set up automatic contributions to your retirement accounts every month. Aim to save a fixed portion of your income. Ideally, you'll save at least 10% of your income for retirement. If you can do more, that's even better. If you can't do that much, that's fine -- save what you can. No matter how much you start saving, try to increase the amount every year so you're putting away more.

When you automate your retirement savings, you get used to that money coming out of your account. While you won't see the benefits right away, your nest egg will grow every month. By the time you're ready to retire, you'll be well prepared financially.