A recent survey by LIMRA, which is an association related to the financial services industry, found that 49% of American’s are saving nothing for retirement. The percent is even higher for 18-34 year olds, of which 56% save nothing. This includes either an IRA or a retirement plan at their place of employment.
Because we get too worried about these numbers, we need to keep a few things in mind:
- We don’t know who was surveyed. They could have interviewed a bunch of people that are unemployed which would skew the numbers. (Note, I’m not saying this was done, I’m just pointing out a possibility.)
- Times are tough. Many people may have cut back on their savings just to afford daily life.
- The 18-34 group percentage is misleading. Many 18-22 year olds are in college, meaning they aren’t going to be saving for retirement. Add to that those that jump right to grad school or travel for a few years after graduating and we’re looking at 26-27 when most will start saving. Personally, I didn’t start until I was 25.
But with all of that said, there are many people who do not save for retirement and even more that save too little. In fact, almost every year a new survey comes out and the numbers are usually close to what they were before.
I would like to hear from or interview someone who is currently saving nothing for retirement to understand their reasons why. If you are covered at work with a 401(k) plan, it only takes a few minutes on your lunch break to call email human resources for the paperwork to start contributing. The benefits department will take care of the rest.
I save as much as I can for retirement. I’d like to save more. I can’t imagine not saving and trying to get by in my last years of life with nothing. It’s not how I want to live.
Readers, are you currently saving for retirement? If not why not?
{ 12 comments… read them below or add one }
Of course I'm saving! This is the best time to save – if you can. Yes, I am struggling and could definitely use more money from my paycheck. But, as I've learned, I need to pay myself first. I am not without food, shelter, or basic needs. Therefore, I push myself to save for retirement. I would rather "suffer" a little now, than later. I have been saving since my first job at 17 years old. I am 30 now. That's even going through undergradate school (while working full time) and grad school. SAVING IS JUST SOMETHING THAT NEEDS TO BE DONE…NO MATTER WHAT!!!
Awesome job!! I agree, save no matter what.
This makes my skin crawl a bit – I think lots of people expect that the government will end up paying a lot of their retirement, or they think they are too young to worry about it, but I don't see this as the case. I'm only 23 and I put away a small amount (very small, but at least I'm doing something!)
Some of the young people I talk to feel this way…why have plenty of time to start saving. They never think about where the money will come from when they are taking care of their spouse, kids and possibly helping their parents or siblings out in a few years. Plus, I don’t think they grasp the time value of money in that you will need to save a lot more to reach your goal the later you start.
As Charles Barkley would say… that's terrrrrrible. I'm maxing out any tax-favored account I can get my hands on and saving more outside of retirement accounts! I'm hoping "Old Nick" will be happy with me
Love it!
I currently save up the company match in my 401k, which is 6%. Plus the company puts in an additional 2% whether you contribute or not. I find it scary that so many people don’t put anything away for retirement. They’re just asking for trouble later on in life.
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Good to hear you are taking advantage of the free money from your company!
I'm currently saving for retirement, but not as much as I should be. It is crazy to think of the people who aren't saving anything at all. I'm not sure what those people are thinking. You're right though that polls like this are easily influences to get the specific results that they want to report. For example, maybe they went to a grocery store in the middle of the afternoon on a weekday. Or maybe they focused on other areas where they knew less people would be in a position to save.
I try not to take the surveys too seriously. But when you hear random people talking about how little they have, it’s scary and sad.
I started saving when I got my first job after college and have continued through graduate school, all in an IRA. I dream of a day when I might get an employer match…
I’m a big proponent of living beneath your means, so I think no matter what you earn you should set up your life so that you can save.
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I’m one of the many Americans making $10/hour, underemployed with a college degree. That’s why I’m not saving!