A recent survey by LIMRA, which is an association related to the financial services industry, found that 49% of American’s have no retirement savings. The percent is even higher for 18-34 year olds, of which 56% have no retirement savings. This includes either an IRA or a retirement plan at their place of employment.
Real Stats For No Retirement Savings
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.
There Are Many That Have No Retirement Savings
But with all of that said, there are many people who have no retirement savings 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 has no retirement savings to understand their reasons why. If you are covered at work with a 401k plan, it only takes a few minutes on your lunch break to call or email human resources for the paperwork to start contributing. The benefits department will take care of the rest.
How To Buck The No Retirement Savings Trend
If you are part of the group that has no retirement savings, all hope is not lost. There is plenty you can do. The key is that you start now so that you can take advantage of the effect time has on your investments.
- Sign up for your 401k plan at work. It won’t take much time at all. Contribute at least the amount needed so that you get the company match.
- Next, open up an IRA at a firm like Betterment. They make investing easy and you can invest with little money each month. Just set up a monthly transfer and you will invest automatically.
- Make it a point to increase how much you save each year. You don’t have to increase the amounts a lot, just $20 per month. It doesn’t sound like much, but when that money compounds, it grows into a lot of money. Trust me. When I started to save for my retirement, I was saving $30/month. I look back on how much I have now and am blown away.
- Find ways to lower your monthly expenses. The lower your out of pocket needs are, the less you need saved for retirement. Learn more here.
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, do you have no retirement savings? If not why not?