You Shouldn’t Save for Retirement in 2022 Under These Circumstances – GOBankingRates

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Are you struggling with your finances or concerned that you haven’t started saving for retirement yet? You’re not alone. A 2019 report from the U.S. Federal Reserve found that 13% of people over age 60 don’t have any retirement savings, while 17% of people ages 45 to 59 lack any retirement savings apart from Social Security benefits. It’s even worse for younger people. Forty-two percent of those aged 18 to 29 have no retirement savings, and 26% of millennials aged 30 to 44 lack retirement savings.

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Meanwhile, Chase Bank estimated that you’ll need roughly 90% of your income to retire comfortably, while you can expect roughly 40% to come from Social Security funds, as previously reported by GOBankingRates. If you haven’t started saving for retirement — or think you should ramp up your efforts to meet your goals — it might be wiser to wait. While that advice may seem to go against conventional wisdom, if you are in a specific financial spot right now, you’ll want to allocate funds to other efforts first, Motley Fool recommended.

Here are two potential reasons you may want to consider holding off on retirement savings:

1. You Lack Emergency Savings

If you don’t have an emergency fund, you should put your focus there first. An emergency fund should cover three to six months of living expenses, including your housing, car payments, gas, food and utilities, Motley Fool recommended. Whether you include discretionary expenses, such as streaming services or dining out, into your emergency savings fund is up to you.

If an emergency such as illness or job loss occurs, it could mean tightening your belt if you have to live on savings for a while. But that beats the alternative of incurring high-interest debt to make ends meet (more on that soon).

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Motley Fool advised keeping your emergency nest egg in a high-yield savings account or somewhere else where it’s easily accessible. Some online savings accounts offer excellent interest rates. But make sure you can access that money immediately through a debit card or other means. Some online bank accounts require four to five business days to transfer funds to a brick-and-mortar checking account, but you can usually access the money immediately via debit card at an ATM.

2. Abundance of High Interest Debt

If you are looking at high-interest credit card debt, you’ll want to pause your retirement investment efforts until that is paid off. If you’re investing in a retirement account with an average yield of 3% to 8% but paying the national average of 16.7% or even more on credit card debt, you’re losing money daily. With interest rates on the verge of an increase, it’s wise to pay off high interest debt as quickly as possible.

If your credit is good, consider transferring some of that debt to a credit card that provides a 0% introductory APR offer. Calculate how much you’ll need to pay toward the bill each month to pay off the card before the introductory period ends. But be smart about transferring balances; put your older, high-interest card on ice so you aren’t tempted to use it.

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Once you’ve got at least three months of emergency savings socked away and have reduced your credit card debt to a manageable amount, it’s time to re-visit your retirement plans and make up for lost ground. A financial advisor can help you find the best places to put your money for the highest yields or most security depending on your age, how many years you have left until retirement, and how much money you have already put into retirement savings.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.