Insufficient Retirement Savings Rate Confirmed By New MoneyRates Poll

National Save for Retirement Week Aims to Get Your Savings Rate Up

Considering the results of a new Money-Rates.com poll, the timing of National Save for Retirement Week could not have been better.

The Money-Rates.com poll, conducted in conjunction with GetRichSlowly.org (a Web site offering personal finance tips), showed that 52% of respondents say they are not on track with saving for retirement. The prospect that over half the population may not be able to afford to retire paints a grim picture of the nation's financial future.

National Save for Retirement Week

How can America get those retirement savings rates up?

National Save for Retirement Week (October 18 to October 24) is a start. Organized by the National Association of Government Defined Contribution Administrators (NAGDCA), National Save for Retirement Week has also been endorsed by resolutions passed by the US Senate and House of Representatives.

Milly C. Stanges, Vice President of Public Affairs for the International City/County Management Association Retirement Corporation (ICMA-RC), has been involved with National Save for Retirement Week since its inception in 2006. She describes the event as "an excellent opportunity to put the spotlight on savings."

One goal of this initiative is to start people saving sooner. As Laura Levine, Executive Director of the Jump$tart Coalition for Personal Financial Literacy, explains, "Today's youth will be better educated about money management, including how to prepare for retirement, as a result of the concerted effort among educators, educational organizations, the financial services industry, government entities, parents, and others."

According to Stanges, an important tactic of National Save for Retirement Week is to reach individuals through their employers. "We hold seminars and provide materials plan sponsors can use with their employees, such as posters, flyers, giveaways-all focused on getting their attention."

Addressing Your Savings Rate

Ultimately, the responsibility for retirement saving falls to each individual. Programs like National Save for Retirement Week will help inform you, your employer may provide a retirement plan as a vehicle for saving, and with any luck Social Security will still be around to chip in. Still, nobody but you can make sure it all adds up to enough in your retirement.

If you, like most who answered the Money-Rates.com survey, are not on track in saving for retirement, take this week as an opportunity to act. Here are some things you can do, no matter how close to retirement you are:

• Have a plan. Don't leave retirement saving to chance. You need to do some detailed and realistic calculations about how much money you'll need to see you through retirement and how much you'll have to save in each year of your career to reach that goal. Use tools such as Money-Rates.com calculators and account yields to help you create or refine your plan.
• Curb your lifestyle now--or have it curbed for you later. In large part, retirement saving is about trade-offs: you sacrifice a little spending now so you can have money available in retirement. Better to make some voluntary choices now than to have hard choices forced upon you by poverty when you are older.
• Max out your 401(k) plan. 401(k) plans have tax deferral advantages and often come with at least a partial company match. This is free money. Why wouldn't you make the most of it?
• Go beyond your 401(k) plan. Retirement is often referred to as a three-legged stool: Social Security, employer plan, and personal savings. Getting that third leg in place--personal savings--will help stabilize your retirement.

To sum up, as Stanges says, "Employees need to start saving now. Start small and stay committed.  And remember it is never to late to start saving for your retirement."

Source:

National Association of Government Defined Contribution Administrators (NAGDCA):

• http://www.nagdca.org/userfiles/file/National%20Save%20for%20Retirement%20Week%20Key%20Messages.doc
• http://www.nagdca.org/userfiles/file/Schwartz_Dear%20Colleague%20Letter.pdf

National Save for Retirement Week: http://www.retirementweek.org/