Why most people don't have retirement savings
The Employee Benefit Research Institute released a survey regarding the current retirement savings situation – and the news is bad! A staggering 43% of employees have less than $10,000 saved up for retirement – that percentage was 39% in 2009, so the situation is worsening by the year. In fact, this percentage has increased each year for the past three years. What are the reasons for these grim statistics?
There are currently 14.9 million Americans who are out of work, making it nearly impossible for those people to pay their daily expenses, not to mention save for retirement! During tough economic times, saving for retirement tends to be put on the “back burner” and it usually is not a priority – paying the mortgage on time and being able to buy groceries is certainly more important, during the recession, hence these statistics. However, regardless of what your financial situation looks like, there are always ways to cut spending and live a more frugal lifestyle (see our 20 Laws of Saving Money for more info on saving money).
The survey went on to say that 27% of workers have under $1,000 saved for retirement, up from 20% last year.
The key to accumulating retirement savings is to start contributing to a 401(k) or a retirement savings plan as early as possible! Even for those who’ve recently graduated from college – start saving! The earlier you start, the more money you’ll have by the time you retire. Also, saving earlier in life will allow for extra time to recover losses in the event that the markets decline.