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Plan Well, Retire Well

Saving and investing your money

Make It a Habit You Can't Break: Save Money

Across America there's an amazing sound: "clink, clink, clink." It's the sound of savings accounts adding up and revolving credit card balances going down! Personal saving as a percentage of disposable personal income was 5.3 percent in December, according to the U.S. Department of Commerce. This is a significant increase from the personal savings rate a few years ago – and definitely a good trend – congratulations to all who are saving more money!

However, other numbers lead me to worry. Thirty-four percent of Americans have no retirement savings and 27% have no personal savings, according to the results of a recent The Harris Poll. A Hewitt study found that four out of five Americans are expected to fall short of the money they will need to meet their financial needs in retirement.

What do all these numbers mean for us? Well, we're moving in the right direction, but overall we need to do more saving and investing to have a secure financial future in the long-term. Don't let this discourage you! The Hewitt analysis found that American workers can significantly improve their financial situation with a few small adjustments.

  • First, if you're not currently saving, start!
  • Next, regularly increase your savings rate, and your contribution to retirement plans. The Hewitt analysis reveals "many workers who commit to increasing their retirement contribution by as little as one percent each year for five years will be on track to meet most of their financial needs in retirement."
  • Or, plan to work longer. Delaying your retirement age to age 67 also will help avoid savings shortfall.

What do you need to do? Take a look at your financial situation and decide what steps you want to take. My suggestion is to set a savings goal, and put it into writing. Writing down goals helps make them clear and increases our likelihood of accomplishing the goals.

America Saves is a nationwide campaign to help people save money, reduce debt, and build wealth. Next week (February 20 – 27) is America Saves Week. Enroll as an America Saver (for free), set your savings goal online, and you'll receive motivating newsletters, money saving tips, and more to help keep you on track with your financial goals.

When you save regularly, small amounts add up. Make saving a habit -- in the long-run you'll be glad that you did!

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