I have been thinking a lot lately about the state of the average American... or the median American... because that person is in a worse position than she was twenty years ago. I was extremely lucky to have paranoid parents who told me I couldn't rely on anyone but myself when it came to securing my future, and started a nest egg for me when I was still a kid, and then an IRA as soon as my wages at their little retail pharmacy were high enough... and forbade me to touch either until I was retired!
Most people are not as lucky as I was, though. According to the 2012 Retirement confidence survey,
http://www.ebri.org/surveys/rcs/2012/ 30% of workers have saved less
than $1000 for their future, and only 81% of workers with retirement
savings plans available to them through their employers actually
participate. Since I doubt that 30% of workers are in their first few
years in the workforce, those are daunting figures when we consider that
Social Security alone isn't enough to get by on even now, and is not
guaranteed to exist when I retire, even though it eats up a significant
portion of my income (I'm self-employed, so pay more than double the
tax). I have friends who have not been able to save and am sure there
are others I think are doing okay based on their lifestyles, but who
just haven't thought about their futures. So, I thought I'd post some
links here that might help with forward thinking.
Department of the Treasury links to some helpful tools at http://www.choosetosave.org/ including an interactive estimator that
helps determine how much you'll need to save based on what you think
your needs are http://www.choosetosave.org/ballpark/ (caveat: skip the calculator if seeing how much you need to save will just make you feel sick and hopeless) and a debt
Not to be outdone, the Deparment of Labor also has some generic (but useful) suggestions for saving for retirement
For those of you who know me just a little too well, don't laugh when I say that Martha Stewart has what is perhaps an over-simplified, but nonetheless easy-to-use budgeting tool http://images.wholeliving.com/images/content/web/pdfs/2009Q2/bs_0509_expensesworksheet.pdf I
think this worksheet can actually be pretty helpful for those of us who
do not think about where our money goes. She mentions using credit card
statements as reference, but don't forget your bank account and cash.
You don't have to account for all cash outlays, just pay attention to
how much you take out and book it towards personal or entertainment.
Alternatively, there's always the "pay yourself first" method for those who are free and clear of debt. When you get paid, transfer a set amount or percentage to a separate account that you don't withdraw from. If at the end of the month, you didn't notice any change in your lifestyle from before, you'll probably be okay socking away a little more the next month.
I hope these links are helpful. At the very least, I hope that this post spurs someone who hasn't thought about their future yet into thinking about it.
edit: Forgot to mention Credit Unions! Unless you make a lot of international transactions, credit unions are often a better choice than commercial banks, primarily because both their borrowing and lending rates tend to be better than banks. They are non-profit entities whose clients are all members, each with a single vote.
PARDON MY FRENCH
1 day ago