The state of Americans’ financial planning for their futures is dismal. The bottom line is that a majority of people are opting out of taking control of their finances and planning for their future.
Do you really want to count on government programs to support you in your later years? What if you decide you want to retire in your 30s, 40s or 50s?
In this Governing magazine article (July 16, 2015), the crisis is described: Roughly 45% of working-aged Americans’ households have no retirement savings at all. The median balance of retirement accounts was $3,000 for all working-age households. For those in near-retirement age, the median retirement account balance was $12,000.
This alone should inspire all of us to work even more diligently to sock away as much of our income as possible into income-generating assets during our working years. Stop thinking that the 10% contribution to your employer’s retirement plan will be enough. Stop fooling yourself that you’ll enjoy working until your mid 60s. Stop relying on your past good health to predict your future health.
The above article also states that $16,000 is the average annual social security payout for retirees. That’s not much above the national poverty level.
Putting all these pieces together and visualizing our retirement at these levels is sobering. It should also make eliminating a few extra luxuries easier, knowing it will later be a gift to me and my family.
- If you have not started your own investment account (outside of your employer’s retirement plan) set one up and deposit $25.
- Add raises and any money you cut from your budget (both one-time savings and monthly savings).
- Set small goals. Start with $25 each month, but increase that to $50 after two months, and so on.