It looks like some Americans are finally catching up with the need to save money for retirement.
Fidelity Investments now says those of us who have 401(K) plans are putting more than 14 percent of our income into them. That’s a new record, and it’s getting close to the 15 percent that financial advisors actually recommend.
“This makes sense,” said KTRH Money Man Pat Shinn. “Baby boomers are in their peak savings years.”
Fidelity reports that baby boomers are indeed saving the most, 17.2 percent. Generation X still beats the targets by socking away 15.4 percent, while millennials manage to save 13.5 percent
As Shinn sees it, anyone looking ahead towards retirement can’t miss the constant media reports about what’s ahead.
“The narrative more and more is coming that ‘Hey, Social Security might not be there for you. You’re going to need to save more for retirement yourself. Don’t depend on the government to fund your retirement,’” he said.
What should you be saving? The Securities and Exchange Commission offers advice on its retirement investment guide website which includes a calculator to give a “Ballpark E$timate” of how much you’ll want to put away.
401(K) plans are also becoming increasingly common. About 70 percent of private sector workers have a 401(k) as an option and businesses increasingly enroll their employees automatically. Shinn says that strikes a valuable blow against procrastination. “A lot of people, when they start their job, say ‘I’ll do that later.’ Then years go by, and they’re still not enrolled.So auto-enrollment is a good deal.”
One ongoing challenge is those who don’t have the option of 401(k) plans. Then Shinn recommends an Individual Retirement Account. Anything to make sure you’re putting some money away.
“You just save as much as you can, for as long as you can,” he said. “But it’s just like losing weight. It’s sometimes hard to do.”
Photo: E+