Saving for the Future

Let's face it: Living is expensive. Today, we are living more active and engaged lives 20 to 30 years longer than our grandparents did. We are going to need a lot more money to finance those lives. It's no surprise, then, that one of the things we fear most about living longer is that we may outlive our money.

Unfortunately, for many of us this fear is a very real one. Here's a shocking fact: Over half of all households nearing retirement have absolutely no retirement savings, and Social Security provides most of the retirement income for about half of all households headed by people age 65 and older.

Why have so many of us not saved for our retirement years? The reasons are simple. We're busy people living busy lives. Most of what occupies our minds has more to do with next week than 30, 40 or 50 years from now. Most of us have never taken the time to sit down and think through what we will need to live on when we are older. Some may find it a daunting prospect. Some feel they just don't have enough time to devote to it right now. Still others simply don't know how to begin to calculate what they'll need because they haven't thought about what they'd like their retirement years to be like: Do I want to travel? Do I want to continue working part time or start a new business? Do I want to pursue my passion and purpose by volunteering? Will I need to take care of my aging parents?

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On top of that, for many people, especially those younger, retirement in the traditional sense has no meaning. Advice from family members and financial planners to save for retirement falls on deaf ears. Likewise, the idea of achieving financial security is also a nonstarter. Having experienced the ups and downs of the job market, the stock market and the real estate market in recent years, they've seen the impact those fluctuations have had on people near or in retirement, so they often view saving for retirement as an exercise in futility.

There are practical impediments as well. Fifty-five million Americans have no access to a retirement savings plan at work. Yet, employees who are able to save for retirement out of their regular paycheck are 15 times more likely to save. Small businesses and AARP are teaming up to support Work and Save legislation at the state level, an easy way for businesses to help workers save toward a secure and independent future. For more information about such plans, go to aarp.org/ppi/state-retirement-plans/.