Money for retirement won’t magically appear, although thinking it will can be comforting. You might put faith in believing that saving will get easier later.

But — poof! — the illusion vanishes, and you are further behind.

Here are common “magical” reasons for not saving for retirement now, and how to break their spell.

‘The market will go up every year.’ “Despite two catastrophic bear markets in the past 20 years, people still think the market will magically return 10 to 12 percent per year over all time periods,” said David Metzger, a certified financial planner and founder of Onyx Wealth Management in Chicago. “It sets up for some risky expectations.” 

Get real: The stock market’s average annual return is about 10 percent over the past century, as measured by the S&P 500, a benchmark that includes the 500 largest publicly traded U.S. companies. Some years delivered bigger gains and some delivered losses. Understand how the components of your portfolio are invested and the returns you can reasonably expect for your time horizon, Metzger said.

‘I’ll inherit enough money.’ Relying on an inheritance is risky. Relatives may not be as well off as they appear. Nursing home expenses could wipe out their portfolios. Or they could leave their money to other people or charities.

Get real: Build your own nest egg. “Start with baby steps,” said Charlie Horonzy, a certified financial planner in Chicago. “Get comfortable with saving 1 percent of your income. Once you’re OK with living on 99 percent, then save 2 percent.”

‘I can rely on my home equity.’ Some people think “their lack of savings is no big deal because they have home equity,” said Quentara Costa, a certified financial planner in North Andover, Mass. “At the end of the day, you can’t pay the bills with a brick from your front stairs.”

You could sell the home and buy a less-expensive place, keeping the difference. But for many people, “downsizing” is a lateral move. “Their smaller condo may end up costing just as much as their original home, if not more,” Costa says.

A reverse mortgage — a home-equity loan you don’t have to repay as long as you live in the home — can provide money in retirement. But the loans aren’t for everybody.

Get real: Think about how you want to live in retirement and set savings goals accordingly. Use a retirement calculator to estimate how much you will need, and pour money into accounts to get there.


Barbara Marquand is a writer at NerdWallet. E-mail: Twitter: @barbaramarquand.