Saving is an important element to adulthood. When we save, we are delaying our instant gratification in order to consume and be financially secure at a later period. Over the years, we have become accustomed to purchasing any good or service at a moment’s notice because we have access to vast sums of money that isn’t necessarily ours. This will prove to be a disastrous move considering that tomorrow inches closer and closer and we can no longer work, whether it’s due to physical restraints or an economic downturn.
A new Bankrate.com survey found that more than one-third of Americans lack retirement savings, but for those who are putting money aside they aren’t saving enough. Also, more than one-quarter of those aged between 50 and 64 have zero retirement savings, a doomed realization since retirement is right around the corner for this demographic.
Greg McBride, Bankrate’s chief financial analyst, said in a statement that he was surprised by the fact that so few people have started saving for their winter years. He’s also concerned, though, that people who have good intentions of saving for a rainy day aren’t doing enough of it.
There was one “pleasant finding,” though. Ten percent of survey respondents reported they began to save for retirement in their teen years. Meanwhile, 23 percent started to put money away in their 20s and 14 percent of people in their 30s also set aside money for their golden years.
Although some people love their work and plan to perform their duties until they’re buried six feet under, Gail Cunningham of the National Foundation for Credit Counseling presented the case that they need to consider a potential job loss or medical issue that would force them to retire and rely on their savings.
McBride noted that some people have become aware that Social Security is unstable and is on the cusp of bankruptcy within the next decade or so (SEE: 17 facts to show retirement will cease to exist in the future). This is a warning for millennials now, who may not have a safety net and must depend on their own savings in the next 40 to 50 years.
“The burden for retirement savings is increasingly upon us as individuals, and people are aware of that,” McBride told the Los Angeles Times. “The younger you are, the more of an ally time becomes. The power of compounding is most evident over long periods of time, and having a longer period of time for your retirement savings to grow and compound makes today’s contributions much more impactful.”
It isn’t hard to sympathize with Americans who refuse to save money. According to a Federal Reserve study we reported on earlier this month, one-quarter of households are “just getting by” and millions of households are living paycheck to paycheck and are on the verge of collapsing if one person were to lose their job.
Hard times are definitely defining the United States at this point in time.
One of the problems is a lack of education about retirement and retirement planning. Planning for retirement should be a priority for everyone. For those who can afford to save/invest the key is to start saving/investing early in life, be consistent, take advantage of any employer matching plan, max out contributions when possible, eliminate debt, avoid risks with your nest egg and plan for multiple streams of income once retired and make catch up contributions once you reach 50. The site Retirement And Good Living offers information on planning and investing as well as other financial topics, health, retirement locations, part time work and also has a great blog of guest posts from around the globe about a variety of retirement issues.