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10 Signs You Aren't Saving Enough for Retirement

We've come up with some common warning signs that you may not be saving enough and need to increase what you're investing.

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Are you concerned that you aren't saving enough for retirement? Well, you're not alone. In fact, more than one third of Americans haven't started investing for retirement yet. About 75% of Americans over the age of 40 are also behind on their retirement savings, so it's time to break the statistic. We've come up with some common warning signs that you may not be saving enough and need to increase what you're investing.

See Also on Kiplinger: Special Report: Saving for Retirement

1. You Don't Have Specific Goals in Mind

First, you need to figure out what the minimum is that you'll need to retire. This will allow you to properly plan your retirement and ensure you are meeting your benchmark goals. Work on determining a target retirement age and goal amount so that you can develop a savings plan on your own or with a skilled professional.

It's also important that you know what you'll get from Social Security so that you can plan what you need to save above that. Lastly, work on an estimated monthly financial plan so that you have some idea what you'll be spending on monthly bills and debt payments.

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2. You Don't Know How Much to Save

Most professionals recommend saving at least 10% of your gross salary, if you've been saving since your 20s. However, if you don't start saving until your 30s, Schwab recommends upping that contribution to 15%–25%. If you start in your 40s or later, you would want to save 35% of your income, which is a rather hefty amount. This is all thanks to the power of compounding interest, so it's never too early to start saving.

3. You Aren't Matching Your Employer's Contribution

If your employer is matching your 401(k) contribution, that is basically free money invested in your future. That's why it's crucial to at least match your employer's contribution, so that they can help you prepare for your retirement as much as possible.

4. You've Borrowed From Your 401(k)

Borrowing against your 401(k) is never a good idea. It may help in the short-run, but in the long-run, it can affect your savings goals and financial health during retirement. You would also need to save more aggressively going forward just to catch up with your original savings goals.

5. You Aren't Prioritizing Your Future

One of the first things you should always think about is building savings for yourself so you have the money you need in case of an emergency or unexpected expense. Short of that savings account, you shouldn't be prioritizing anything over your retirement savings. Your retirement and your future should be your first priority, even over your children's education, because nobody will be saving for your retirement except for you.

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See Also on Kiplinger: Tool: Retirement Savings Calculator

6. You're Only Investing in a 401(k)

Contributing to a 401(k) is a great start to your retirement savings, but it usually isn't enough. Your best bet is to diversify your portfolio, investing in both a 401(k) and an IRA or Roth IRA. This will ensure you are well prepared for your golden years. (See also on WiseBread.com: Which Retirement Account Is Right for You?)

7. You Aren't Accounting for Inflation

On average, inflation rates linger around 3%, which means that your expenses will double in less than 25 years. You will need to account for this, as it's one of the biggest retirement planning mistakes anyone makes.

8. You Haven't Sought Advice

You may not necessarily need a financial planner, but that doesn't mean that you shouldn't seek advice on your retirement portfolio from time to time. For instance, have you diversified properly? Are you investing in the right types of investment products? Have you adjusted your portfolio to match the appropriate level of risk and reward for your age range and lifestyle? These are some of the many questions you need to ask yourself (and/or a professional) to ensure you are saving and planning correctly. (See also on WiseBread.com: Do You Need a Financial Planner?)

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9. You Haven't Started Saving Yet

The sooner you start investing in your future, the more you'll have by retirement, thanks to compound interest. This also means that the sooner you start saving, the less you'll need to save every month to have enough in your retirement years. (See also on WiseBread.com: Stop Making These 10 Bogus Retirement Savings Excuses)

10. You're Worried About Retirement

Possibly the most obvious sign that you aren't saving enough is that you feel very nervous about retirement. If you don't think you're saving enough, then you probably aren't.

This article is from Andrea Cannon of Wise Bread, an award-winning personal finance and credit card comparison website.

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This article is from Wise Bread, not the Kiplinger editorial staff.