I’m not surprised that half of Americans don’t save for retirement. I continue to save for retirement even though I can’t actually afford to put money aside for long-term goals. I know I really haven’t been able to save for retirement for the past 5 years because of my bad habit of borrowing from my 401(k) and taking back out the money I put into the Roth IRA. According to a recent article by 24/7 Wall Street, almost half of people surveyed said it’s impossible for a middle-class family to save for retirement. Twenty-five percent are not saving anything at this time. As a member of Generation X with two millennial children, I know there are too many factors weighing on the middle class. Even though I can’t afford to save as much as I have in the past, I don’t think I’ll deplete all of my retirement savings before I’m 70. That’s why I continue to plug away at my retirement savings goals.
Saving early didn’t help
According to the survey, 47 percent regretted not saving early enough for retirement. I don’t think those people have anything to regret. The truth is, not everyone has had great results even if they started investing in their 20s. In my case, I started buying stocks during the dot.com bubble. For me, the benefit of saving in my 20s was more about establishing good financial habits. Unfortunately, I spent much of the money I saved for retirement as my expenses increased in my 30s and 40s.
Changing my percentages
Financial advisors always advise people to automate their finances, especially when it comes to retirement savings. I used to ask my company to withhold 15 percent of my income for my 401(k) plan. I soon borrowed from my 401(k) for a down payment on my home, my children’s college and a car. Now, I simply admit I can’t save 15 percent. Instead, I change my percentage from anywhere from 5 to 10 percent, depending on the situation. I try to limit myself to a change every quarter.
Facing a bleak future
According to a Market Watch article that cited the same Country Financial Security Index survey, people who save nothing for retirement are really stealing from their own futures. I know my future self will be raving mad if she finds out there is only $20,000 in a Roth IRA because I spent it on new wood granite countertops for my kitchen when I was in my 40s. People in the younger generations can’t count on Social Security.
I guess the bottom line is that even though I know I can’t afford to save for retirement, I also can’t afford not to save. I have to make the trade-offs now. I can give up going to the movies and eating out once a week so that my retirement savings grows. I don’t like how much my family has to pay for college tuition, health insurance and home owner’s insurance. I don’t like the fact that it’s hard to find a well paying job in today’s economy. Still, I have little choices I can make in the middle class every day. I won’t be part of the retirement savings crisis in this country. I hope I have enough savings that I can leave my Social Security benefits there for someone who needs the money more than me.
More from this contributor:
Becoming a Roth IRA Millionaire
Retirement Decisions I’m Making in my 40s
Why I Don’t Follow a Millionaire’s Advice