Retirement is always something workers struggle with most of their working career. We are three decades into the 401(k) era and still millions of works struggle to make the most of their investment. According to new research only 32% of workers in the us believe they are on track for retirement. So what about the other 68%?
In 1980, Ted Benna, a benefits consultant, designed a savings plan that was meant to supplement traditional pensions and savings. 401(k) retirement savings plans quickly dominated the retirement arena becoming the retirement funding vehicle for most working Americans. Americans have invested $3 trillion over the last few decades to 401(k)s. While in the beginning these plans were complicated and heavily laden with fee, over the year the fees have significantly lowered and through features like automatic enrollment and escalation of contributions, the investing mistakes have minimized. Many experts would like to make the 401(k) and other retirement programs mandatory to help close the gap in retirement savings for everyone.
But it this possible? According to a survey from Transamerica Center for Retirement Studies, one-third of the workers in the US would like to see the government increase funding to Social Security. Many workers expect half their retirement to come from government funded programs, which have been eroding over the year making them unstable and ready for collapse anytime.
With the increasing of longevity over the past decades, people are living longer but still retiring as early as 63. This put a strain on the Social Security system. To help alleviate the strain, the minimum retirement age needs to be pushed back to 65 and the max out at 70.
Another way to help is to have employers rethink their retirement policies. There is a frustration with retirement because there has been very little financial education in their lifetime. If there was financial education available for many workers, they would understand the importance of a financial plan. Almost 755 of employees with financial plans are habitual savers, versus 18% without a financial plan.
So what are some things that can be done to help with retirement? Well, you have probably heard this before, but it is important to save. Having a savings account, or some retirement saving plan is the best. Do not rely on social security to be there for you when you retire. Plan ahead, and even if it is as little as ten dollars a week, save something. You will eventually be able to roll that money into something bigger. Have a plan. Execute that plan, and keep it going.