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Americans and Retirement Savings

 

Americans and Retirement Savings

 

Ready for retirement, according to one recently released financial study, many Americans are not.  It is estimated that one in four Americans, across all age groups, is not saving at all for retirement. A majority of respondents (55%) said they either are not participating in a workplace sponsored retirement plan like a 401(k) or they don’t know if they are in a plan.

In certain age groups, nearly half of respondents no longer believe it’s possible for a typical middle-income family to save for retirement. Surveys have long shown that people “aren’t saving enough” by standards defined by the financial planning community.

Two questions can be a self-test for your retirement planning. The first question about savings is - “What are you doing to save and do you think it will be sufficient to at least get you close to your financial goals?”

The second question is: “What will you do if your savings is insufficient?”

What you would do in case of financial disaster?

DO: Set aside money in a 401-K- By setting aside money in a 401-K plan, you can make sure that money is set aside where you are not able to touch it easily. By putting money aside in a private account, you know that there is a retirement savings account slowly building.

DO: Think carefully about investing in assets- There's nothing wrong with buying a new house, but before you sign the contract, be sure that you can pay it off without having to use your retirement money. Only invest in items that you're sure are not apt to be a detriment to retiring on schedule.

DON'T: Take money for your retirement fund unless it's an emergency - The money set aside in your 401-K is meant to be there for you when you're too old to work anymore. While there may come a time when you need emergency funds, only touch your retirement fund money if it's a dire circumstance. Deciding to take a vacation on a whim is not a dire circumstance.

DON'T: Forget to set money aside yourself - Although most employers used to set aside money for retirement funds, many have switched over to having the employee deposit money on his own. Although it gives the employee more free will over his own funds, it also means that he needs to be more responsible about putting money into his retirement savings fund.

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