Retirement might be decades away, but it's never too soon to start saving for your golden years.
Setting aside money now gives you the opportunity to collect interest, so you can maximize your savings. Even if you're already saving money for retirement, you still need to make sure you're stashing the right amount of cash.
Click through to find out if you're not saving enough for retirement.
1. You Don’t Know Your Savings Rate
If you don't know how much of your income you're saving for retirement, that's a huge red flag.
You should know your savings rate — which is typically calculated by dividing the amount in your savings by your annual income — and be trying to increase it every year. The lower your savings rate, the less money you'll have to last you through your golden years and the less you'll have to afford all of the necessities you've grown accustomed to.
According to the U.S. Bureau of Economic Analysis, the average American saved just 5.5 percent of his or her disposable income as of November 2017. However, experts at financial services firm TIAA recommend saving 10 to 15 percent of your income for retirement.
Click through to see how much you should have in your retirement fund at every age.
2. You’re Spending Too Much of Your Income
Again, the general rule of thumb is you should be saving at least 15 percent of your income for retirement.
But if you're having trouble saving more of your income, take a look at your spending habits and see if you need to cut back. You might find that you're spending too much of your take-home pay on little things that can add up, such as going out to lunch three times per week.
Once you get your paycheck, make sure you put 15 percent — or 10 percent, if 15 percent is too much — into your retirement savings account. Then, divide the rest of your take-home pay between an emergency fund and other expenses you're planning to incur in the future.
3. Paying Medical Expenses Is a Struggle
You might have a few medical bills now, but you'll likely have more as you get older. So, if you're having a hard time finding the money to pay for your current medical bills, you'll probably have an even harder time paying medical expenses when you enter retirement.
HealthView Services' 2017 Retirement Health Care Costs Data Report found that a 65-year-old couple that retired in 2017 — and is covered by Medicare Parts B, D and a supplemental insurance policy — can expect total healthcare premiums and out-of-pocket expenses to total an average of $404,253 in today's dollars. But for a 55-year-old couple retiring in 2027, that cost jumps to $498,962 and soars even higher — up to $635,142 — for a 45-year-old couple planning to retire in two decades.
So, start saving money now. You don't want to have to worry about not being able to pay hospital bills in the unfortunate event that you get sick or injured during retirement.
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4. You Have Credit Card Debt
Whether you're currently living off your credit cards or trying to get out of credit card debt, there's a good chance you're not focused on retirement. Examine your spending habits, and create a budget to start living within your means. Then, devise a plan to start paying off debt and saving for retirement.
In some cases, it might make sense to focus on saving money for retirement first. Or, the opposite might be true: pay off debt, and then start saving for retirement. If you're unsure about where to start, consult a financial planner.
5. You Have No Idea How Much Money You’ll Need to Retire
If you don't know how much you'll need to maintain your lifestyle in retirement, you're most likely not saving enough.
You might not know exactly how much you should save down to the last penny, but you should have a ballpark estimate. Not only do you need enough savings to pay for your living expenses, travel and everything else you're planning to do during retirement, but you'll also need to account for inflation.
6. You’re Not Contributing the Max to Your Employer Contribution Plan
If your company offers to match your 401k contributions, contribute the maximum. It's a quick and easy way to grow your retirement fund and essentially earn free money.
Take advantage of this program if your employer offers it. Otherwise, you'll regret passing up this opportunity if you find yourself struggling to pay for an expense during retirement.
7. You Plan on Relying on Social Security
Sure, Social Security can help you pay for expenses in retirement, but you shouldn't rely solely on this fund. For one thing, the amount of money you receive isn't that much.
If you retire at full retirement age in 2018, your maximum monthly benefit will only be $2,788. But according to the latest data from the Social Security Administration (SSA), the average monthly benefit for retired workers is an even lower $1,404.
As they say, don't put all your eggs in one basket. Whether it's a 401k or an IRA, make sure you have another retirement savings plan in addition to Social Security.
8. You’ve Borrowed From Your 401k
It doesn't matter how much money you have put aside in your retirement savings account if you've already taken money out of it. Although this withdrawal might have helped you in the short term, it can be detrimental to your long-term financial health in retirement. You'll need to develop an aggressive savings strategy to get caught up again.
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9. You Can’t Live Off of Your Current Savings for a Few Months
If you don't currently have enough money saved to last you a few months in case of an emergency, such as losing your job, how do you think you're going to survive 20 or so years in retirement?
Rather than becoming discouraged, use this realization as a wake-up call to get your financial priorities in order so you can start focusing on your future.
10. You Haven’t Worked With a Financial Professional
Saving for retirement is a major undertaking, so it's wise to seek counsel from a financial advisor. He or she can review your portfolio to make sure it's on target to reach your goals, help you plan for inflation and make any necessary adjustments based on your age and desired lifestyle. You probably don't need to meet with a professional on a regular basis, but checking in once or twice a year will ensure you're on the right track.
If all 10 of these signs apply to you, don't freak out — just start planning and saving today. Saving sooner rather than later is preferred, but it's better to save later than never.