According to the 2010 US Census there are now approximately 170 million people in this country between the ages of 25 and 66. By some estimates, only 51 million of these people are participating in an employer sponsored retirement plan (401k, 403b, or similar) and making 401k contributions.
So what the heck are the other 120 million working adults in this country doing to save for retirement!?!
Is it really true that roughly 7 out of 10 of us are not saving for our eventual retirement? Say it ain’t so! I realize that a small segment of these folks will receive a monthly pension upon retirement (teachers, firefighters, police officers, utility workers, etc). My guess is if you had a room full of your friends and you asked them to raise their hand if they are eligible for a monthly pension check upon their retirement, fewer than 10% would raise their hand.
My point here is that we are probably talking about a 100+million problem in this country. Scratch that, problem isn’t the right word…this is an epidemic!
I realize that some of these 100+million people are not offered a 401k plan (or similar) to participate in at their current place of employment. For these folks, my suggestion is that you start tactfully pestering your boss to roll out some type of retirement plan for his/her employees. Until that happens though – don’t let the lack of a retirement savings plan stop you from saving for YOUR retirement. Don’t cut off your own nose to spite your boss – we are talking about YOUR retirement here, not your boss’s. Simply setting up a separate savings account at your bank is a great place to start. Ask your employer’s payroll person if they can set up a 2nd paycheck deposit and request that 10% of your paycheck get directed to this savings account.
For those of you reading this that DO have full and complete access to an employer sponsored retirement account like a 401k – you better darn well be putting money in that 401k account! If your employer offers any kind of a match and you aren’t participating you are literally missing out on free money. At a very bare minimum – start contributing enough to get the full employer match. A better option would be that you carve out 10% of your paycheck into your 401k. The best option would be for you to max out the 401k: $18,000 if you are under 50 and $24,000 if you are 50 or older for 401k contributions which changed in 2015.