In spite of literally thousands of articles, columns and news reports warning of the impending retirement crisis, it’s now 2015 and most Americans still don’t save nearly enough for their post-work years. In fact, according to an April 1, 2014 article in USA Today, 36% of Americans have less than $1,000 in reserve.
To put this in perspective, almost four out of every ten people have not started to prepare for a retirement that will, in all likelihood, not only be more expensive than the retirement of any previous generation, but with advances in medicine, and increases in longevity, our post-work lifespan is likely to last 20 years, or even more.
While most of us procrastinate about starting various menial tasks, outside of taking care of our personal health, delaying retirement preparation carries about as much or more importance as any endeavor. But we play games and make deals with ourselves. We make promises we don’t keep. I’ve met a lot of people who are crossing their fingers, borrowing on their homes, waiting for a possible inheritance, or hoping their business hits it big. Some are even playing the lottery. Anything except the expenditure of time and energy that are necessary to achieve financial independence.
The hard truth is that these people are almost certainly not going to be ready when Father Time (or a tough or changing economy) tells them they can no longer earn the money they once did.
You, me, all of us, we need to get serious about our futures. And we need to start doing it right now.
If your work offers a 401(k) (or any qualified plan), and you aren’t participating, you should sign up immediately. Treat your retirement savings just as you would your mortgage payment. Most people wouldn’t dream of missing their mortgage payment (especially now with home prices and equity again on the rise). Remember, because the money you invest in your 401(k) is withdrawn pre-tax, you’re not only lowering your debt to Uncle Sam by lowering your taxable income, the money is coming out before you have a chance to spend it (or miss it).
Don’t think you can afford it? You can. Start small, if necessary, but start, because even 3% could change your life.
Just as no one is going to do it for you, saving and investing today can put you in the enviable position of someday being able to look yourself in the mirror and say, “I was very smart to start saving when I did.”
So, get smart. And get yourself off the bench and in the retirement preparation game.