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Top 20 Reasons to Start Saving for Retirement Today


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(Photo Credit to: TheMoneyUpdate.com)

(Photo Credit to: TheMoneyUpdate.com)

Last week I expressed how important it is to start planning for retirement. Today, I’d like to show you a collection of recent startling retirement statistics surfacing throughout the web. It’s no secret that saving for retirement has become one of the biggest problems facing every American. Currently, the Baby Boomer generation is feeling the stark reality that accompanies lackadaisical retirement planning. It’s not going to get any better anytime soon either. To give you an idea, for the next 15 years, approximately 10,000 Baby Boomers will retire each day. By 2030, almost 20% of the American populace will be retirees 65 years or older. As the life expectancy age continues to increase it’s apparent that our future will be overpopulated, filled with thousands of elderly individuals all vying for the same government programs, private pensions, and Medicare. Not to mention the fact that most retirees will also need to continue working to supplement their income, meaning the workforce will also become highly competitive. What’s even more disheartening is the fact that one out of six American retirees currently live below the poverty line. That’s definitely not something those preparing to retire want to hear, but sadly it’s the cold hard truth.

Unfortunately, the above-mentioned statistics are not the startling ones. In the years to come, it’s important for the younger generations to get a grasp on their retirement plans while older generations like the Baby Boomers will have to be creative with their income methods to make ends meet.

Why Should I Start Saving for Retirement?

Those in their twenties most likely have not considered their retirement plans. It may sound silly to worry about something forty years or more away, but it’s vital. Younger generations cannot make the same mistake the Baby Boomers did. Unless, you enjoy scraping money together and eating cat food for dinner, in which case sure proceed on your current path. For those of you whose palette is more evolved than cat or dog food, consider these statistics below.

(Photo Credit to: Mint.com/blog)

(Photo Credit to: Mint.com/blog)

20 Reasons Why You Should Start Saving for Retirement

  1. 46% of Americans have less than $10,000 saved for retirement, 29% have less than $1,000 saved.
  2. 74% of the current workforce expects to continue working while retired
  3. 36% of adults have not contributed anything into their savings.
  4. 87% of those about to retire are not confident they will have enough money to live comfortably.
  5. In 1991 50% of Americans working planned to retire before they hit 65. In 2013 the number went down to 23%.
  6. 56% of Americans currently retiring are doing so with an outstanding amount of debt.
  7. Only 42% of private sector workers between 25 and 64 have any type of pension coverage.
  8. A 65 year-old couple retiring in 2012 will need approximately $240,000 to cover medical expenses throughout retirement alone.
  9. Low earners retiring when they are 62 years-old will only receive 40% of their pre-retirement income from Social Security.
  10. 75% of those retiring regret not saving for retirement earlier.
  11. Almost 50% of current retirees had to unexpectedly retire due to health problems, disability or lay-offs.
  12. 1/3 of households are completely dependent on Social Security
  13. More than a third of households end up with inadequate 401(k) balances.
  14. 60% of Americans currently working have reported their household savings and investments (not including house/property value and pension benefits) are less than $25,000.
  15. 40% of the Baby Boomer generation plan to work until they die.
  16. There are currently 40 million retirees in America. By 2050 there will be 90 million retirees all competing for the same resources, services and job competition.
  17. The retirement age is expected to increase from 65 to 67 years old.
  18. As a whole, American workers are approximately $3.6 trillion short of what they actually need to live comfortably.
  19. In 2012, 18.5% of individuals 65 years or older made up the labor force.
  20. 56% of Americans have not attempted to calculate how much they will need to save to live comfortably after retiring.

Okay, I’m Convinced- How do I Start Saving for Retirement?

There are many different ways you can start saving for retirement. Your best option is to start early, it doesn’t matter if you are 25 or 35, the sooner the better. Also, don’t ignore the retirement programs your employer offers like 401(k) plans. Participate and pay into as many offered plans as possible. Not only will this force you to live on a more controlled budget now (preparing you for living on a set income after retiring) but it will also help you save up quite the nest egg. For more ideas on how to start saving for retirement, check out our Planning for Retirement post.

(Photo Credit to: USAToday.com)

(Photo Credit to: USAToday.com)

*IMPORTANT NOTE* – avoid just depositing money into a Savings account! Financial publisher for NewsMax Aaron DeHoog says, “The biggest mistake is keeping retirement savings in a bank account. Inflation will destroy 50% of your savings every 22 years if you let it sit there.”

Safe investments like bonds, CDs, and money market accounts are not performing as well as they used to. These types of investments are yielding 85% less than they did in 2007.

Next Step, Plan and Start Saving Today!

Regardless of your age, retirement should definitely be considered. It’s never too early to start saving, getting a head start on it now will only benefit you in the end. While Baby Boomers were the first generation to struggle in their old age due to the absence of reliable anchors and support systems, younger generations don’t have to follow their lead. The stats above should be enough to prove you should start saving for retirement. It’s time to look at what expenses you can eliminate for your living costs to create more income that can be saved. Cut back on the vacations and nights you eat out for your future’s sake! Sure that steak and lobster dinner may have tasted delicious, but I’d rather eat pasta for a year than having to eat dog or cat food upon retiring!

Have you started to save yet? What are you doing to ensure a comfortable nest egg? How have you planned for retirement? Let us know!

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Sources: Money.USNews.com WhatsNextinYourLife.com DailyFinance.com MoneyNews.com Financial-Planning.com
Certain Stats From: Bureau of Labor Statistics Employment Benefit Research Institute AARP CNBC Zero Hedge

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