What happened to my three legged stool?

Posted by Nancy Hecht, CFP®, AIF®

A generation or so back, many people retired with a pension, social security, and personal retirement savings. This is no longer the case. Hardly anyone receives a pension, we still have social security, but the personal savings rate is so low it is scary. A survey conducted in 2014 by the Federal Reserve has shown that over a third of Americans have no retirement savings. NO RETIREMENT SAVINGS! Many of those Americans never plan to retire. Many are working well into their 80’s just trying to make ends meet while dealing with health issues. What is the solution?

You do not need a company plan to save for retirement. If you have earnings you can open a Traditional IRA. It does not matter how much or little you set aside, just do it. Another excuse for not saving that I often hear is: my company does not match in the 401(k). I say “who cares.” A match is gravy. Every dollar you save pre-tax in your company plan, is a dollar less you pay in federal tax. The money is leaving your paycheck anyway – just put it in your pocket.

Take responsibly toward building your own stool. One that is strong – built out of your own hard work.

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