This year finds more American workers confident they will be financially secure in retirement. As you might guess, 2009 to 2013 saw record lows in the number of Americans confident they could have a comfortable retirement. This year’s Retirement Confidence Survey , the longest running retirement confidence survey of its kind, found that expectations are rebounding. However, the news isn’t all rosy.
American households have very low savings for retirement. Of individuals without a retirement plan (either through their work or an IRA), 73% have less than $1000 in assets. More than half of all American households have not even attempted to calculate how much they need to save (56%).
The increased confidence comes primarily from individuals who have a retirement plan in place – either a work based plan or an IRA.
If you find yourself in the less-than-confident group, what can you do to improve your lot in later life?
1) Start setting money aside every month. Start today. Take a hard look at your spending and decide how you can carve out cash to contribute to a retirement plan. Whether it’s $30, $300, or $3,000, start somewhere.
2) Begin or increase your contribution to a retirement plan. Do you have a plan available at work? Take it! No work plan? Choose a bank or online investment service to open an IRA. For more information about IRAs, check out “Making the Most of IRAs…”
3) Calculate how much you need to save for retirement. Try this Ballpark Estimator . The numbers will be scary, but do it anyway. Seem like this step should have been first? When you encounter a very large, possibly overwhelming number, go back to step #1. Remember – you already have a plan. If you can make your monthly contributions bigger, that’s great. But either way, every little bit you can save will help you live more comfortably later. Maybe it’s too late for you to save for a Malibu beach house, but it’s never too late to make it better.
- Ohio Saves – Pledge to Save and get tips and strategies to save more money each month.
- eXtension – Find trustworthy information about planning for retirement and other personal finance topics.
- Investing for Your Future – Home study course for beginning investors with small amounts of money to plan for the future.
- 10 Steps to a More Secure Financial Future – Investor Education and Resources
Written by: Betsy DeMatteo, Family and Consumer Science Educator, Ohio State University Extension.
Reviewed by: Shannon Carter, Family and Consumer Science Educator, Ohio State University Extension.