The Scary Truth About Saving For Retirement

by Jason Unger

You don’t have to be 55 to start thinking about retirement. In fact, if you’ve waited that long, you’re in a bit of a pickle.

While retirement often seems far away if you’re in in your prime working years, you need to make it a priority … now. Because the scary truth is that most people don’t — and that’s how most people end up broke.

Take a guess at how many American workers have less than $10,000 socked away for retirement.

Ready?

43%.

And how many have less than $1,000?

27%. Yes, 27%.

Think about it for a second. $1,000 is literally almost nothing to last on; $10,000 is probably less than a six-month emergency fund for most families.

And that’s scary. Especially because you can’t count on Social Security to provide much, if anything, to you.

Sure, some of it is because of the economy, and people raiding their retirement accounts to keep afloat. But that’s not the entire problem; the number of people who have saved for retirement (like, ever) dropped from 75% last year to 69% this year.

It’s an attitude change as much as it is anything else.

Here’s how you save for retirement:

  1. Start Now (or as soon as you have paid off all non-mortgage debts)
  2. Invest in Your Company’s 401k up to the match
  3. Open a Roth IRA
  4. Invest only in index funds
  5. Dollar cost average if you don’t have big chunks of money
  6. Once a year, re-balance.

All of this information is available in the Automatic Finances ebook — the $7 download that will change your life. If you haven’t gotten your copy yet, click here to download.

P.S. Based on current sales trends, I am heavily considering increasing the price of Automatic Finances from $7 to $17. Soon. So if you’re on the fence but want to save yourself $10, get your copy now.

{ 2 comments… read them below or add one }

Wojciech Kulicki March 9, 2010 at 5:20 pm

No doubt those numbers are scary, but they are definitely not a surprise for me when you consider that most people simple can’t wrap their heads around what they will need to retire, instead choosing to ignore the issue altogether.

Maybe they think Obama will take care of them in their ripe old age… (oh snap, did I just make a political statement, ahem…back to my usual neutral self). 🙂

Jason Unger March 9, 2010 at 8:19 pm

I think for so long, people did 30 years of work for a company, got a pension, and called it a career. (And had a little bit of Social Security, too.)

But now that we’re out of the age of pensions, you need to do so much more saving and investing to be prepared for retirement — and you need to start it much earlier! It ain’t easy, that’s for sure.

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