Brady Speers

The Difficulty of Saving

An overwhelming portion of the middle-class have all but given up on the retirement

New research shows their despair is a heartbreaking reality

Most people say that saving for retirement is more difficult than they had expected, however there are not

too many people making the necessary adjustments

About 22% of workers say they would rather die early than run out of

money, according to a Wells Fargo Middle Class Retirement survey

In the same survey results yielded 61% of participants are not

sacrificing a lot to save for retirement

Almost 75% recognize they should have started

retirement savings earlier

The survey, looks at the retirement planning of Americans with household

incomes $25,000-$100,000, who also held investable assets of less than $100,000

33% are contributing nothing to a 401(k) plan or an IRA, and 50%

report they have no confidence that they will have enough to retire

Americans who have an employer-sponsored retirement plan,

especially a 401(k), are performing much better than those without one

Americans between the ages of 25 and 29 with access to a 401(k) have put away a median amount of $10,000. Americans ages 30-39 with a 401(k) plan have saved

a median amount of $35,000

Lastly, Americans between 40 and 49 with 401(k)s, the

median amount is $50,000

Despite its many drawbacks, 401(k) remains our go-to national savings

plan, and the most logical choice that the middle-class has at achieving a

good retirement security

Those without access to 401(k) plans would benefit from a direct-deposit Roth or traditional IRA or another

kind of tax-favored account

Data shows that most Americans fail to make new contributions to IRAs, with most of those assets

coming from 401(k) rollovers

There is one exception to current data however, there is a growing

number of Millennials that are making Roth IRA contributions

Most people do understand the need to save for retirement, but they don’t

view it as an urgent goal requiring careful and calculated spending

Americas were asked where they would cut spending if they wanted

to begin saving for retirement

56% of participants claimed they would give up luxuries such as spa visits and jewelry, 55% said they

would curtail eating at restaurants, and 51% even said they would give up

a major purchases ie. cars or homes.

Conversely, 38% of people said they would forgo a vacation

A vacation now and then is great but do the lavish vacations trump the years of retirement security?

Given these economic headwinds, like rising costs in healthcare, education,

and taxes it’s important to have a plan

If you have a 401(k), be sure to contribute at least enough to get the full company match

And if you lack a company retirement plan, opt for an IRA

It is a tough process but it will be a sweet reward when you can retire in peace and feel

secure in your future endeavors