Americans are rotten at saving for retirement.
It’s at least in part because of the seismic market change from 20th century-era defined benefit offerings (the pension you might have gotten working at a company in 1972) to today’s climate of defined contribution plans (the 401k you have at work or the IRA you might have with a company like Vanguard). More recently the Great Recession complicated the story more.
Whatever the case, we know one in three Americans has less than $5,000 in retirement savings. Two-thirds of Americans say they’ll outlive what they have saved, including the half of households that have no retirement-specific savings at all. Rules of thumb to the contrary abound: you ought to have the equivalent of a year’s salary by the time you turn 30, and you might want at least 10 times your top earning salary saved by the time you do retire.
When things are stressful, I tend to try to find some way to make them more approachable.
It’s in part why for the last several years, two childhood friends and I have gotten together once a year to discuss what we’ve tried, learned and accomplished on the subject the previous year. With a bit of nerdy glee, we call it Personal Finance Day, and we just held the fourth annual earlier this month.
Continue reading Your retirement savings goal to strive for should mean you never dip into principal
