In my last column I discussed the recent survey of financial attitudes for young adults. Here then are some ideas about managing finances which can apply to people of all ages.
Convincing people to save for any goal, whether retirement or a new car, is a challenge. It is a good idea but not necessarily what they want, kind of like getting kids to eat their vegetables.
Proof of this idea is that participation rates and deferral rates in voluntary enrollment retirement plans is much lower for younger workers than older employees. Perhaps we should frame the suggestion by saying there are ways to avoid financial mistakes made by the parents. Here are some ideas.
A study by Vanguard showed the average 401(k) participant within 10 years of retirement age (i.e., between ages 55 and 64) has a plan balance of just $69,097. This amount may not provide much help over a retirement of 10 or 20 years. And candidly it is frighteningly low.
Too many workers find themselves behind because they never really addressed the question. So, first you must know where you are going. A MoneyRates retirement plan survey found that 71% of workers within 20 years of retirement age still had not done a calculation of how well their savings will hold up over their retirement years. Doing a rough calculation is not