|By John Ewoldt, Star Tribune (Minneapolis)|
|McClatchy-Tribune Information Services|
We're spendaholics who live powerless to rein in our spending. Few of us are taught to save as kids, so it never becomes an innate habit, said
"We have enormous pressures to spend rather than save," Dungan said. "Spending will always be sexier than saving."
We start our adult work lives in a pattern of paying the monthly bills first — rent or mortgage, food, utilities and transportation — and saying anything left over we'll squirrel away in savings. But something new or unexpected always comes along to squash the savings bug in its pupal stage — the hot water heater leaks, the transmission goes out, Ethan needs braces.
Then five or 10 years go by and savings are meager or nonexistent. Nearly all Americans must have laughed or heaved a woeful sigh at recent reports that even
That's why saving for retirement or a rainy day ought to be mandatory or at least automatic. Some of you are thinking that we already have that —
But some employers are taking things one step further. Several years ago they were given the OK by the government to automatically enroll employees in the 401(k), usually deducting 3 percent from their paycheck. One big caveat? Employees can opt out at any time.
Only about 15 percent of employees choose to opt out, according to
You might think that's proof that people save when pushed. But, without that push, most people aren't that interested in retirement planning. According to a survey by TIAA-CREF, Americans spend more time choosing a special-occasion restaurant, flat-screen TV or a tablet than a retirement investment.
Of course, investing is complicated and potentially humiliating. Now that pensions are almost a memory, employers put the responsibility on us by providing scores of investment choices in a 401(k) with little or no guidance to choose funds.
The answer isn't to avoid saving or investing just because it's a challenge. Employers and mutual fund companies have made it a no-brainer by offering target date funds, said Gail MarksJarvis, author of "Saving for Retirement (Without Living Like a Pauper or Winning the Lottery)." She recommends that people choose a target date fund appropriate for their age or a balanced fund (a fund with 60 percent invested in stocks and 40 percent in bonds). "With these types of investments you don't need to be afraid," she said.
How can savers automate? Ask your employer about nonretirement automatic deductions from a paycheck to start an emergency fund or a down payment for a home. "A lot of employers allow one or two other auto payments. When a person doesn't see it, they don't spend it," said
Even some credit or debit card companies are encouraging people to save by allowing them to opt into programs to "round up" a purchase amount in
No matter the savings amount, we need to be shocked into the reality of saving. Wenner uses an instant aging tool on the Internet to help people literally see what they will look like in 20 years. "I have to put that future in their present," he said. "People who say they will work until they die may not realize that they could be laid off or too tired or sick to work."
For those Americans who claim they can't save, a new report by Interest.com has good news/bad news.
The good news is that typical household in
The bad news? The median savings rate in
The sooner that we realize that the best way to save is to automate it, the less we'll have to worry about
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