Retirement? Wow, even as the age approaches more and more each year, I feel way under prepared. As a freelancer I have been lazy about setting up retirement plans. I have tried to set up savings options, but after bills and taxes, I never seem to have the “extra” to set aside. And then, doing the research and organizing all that paperwork, well, it just seems to be too much. If someone else could just do it for me–for free — that’d be greaaaat. But since they can’t, I keep pushing it back in my mind, thinking there is plenty of time or that I just won’t retire. Not a good plan, I know. But I am not alone in that way of thinking, unfortunately.
While nearly a third of Americans over the age of 18 have no retirement savings, 23 percent of people between the ages of 45 and 59 have no savings or pension, according to a 2014 study by the Federal Reserve. And African Americans are in even worse retirement space, found the Urban Institute. “In 2013, the average white family had more than $130,000 in liquid retirement savings, compared to $19,000 for the average African-American family and $12,000 for the average Hispanic family,” reported The New Republic. This is due in part to the racial wealth gap, and also a lack of planning.
I am so not alone in my silent freak out over my impending retirement–no matter how far off it may be. As a new article in Bloomberg pointed out, millennials are worried over retirement but aren’t taking any action–or if they are, it’s minimal.
“Young workers today probably can’t even think about retiring for 40 or 50 years. Longer lives and the prospect of weaker investment returns mean millennials will probably have to save more money, over a longer period of time, than their parents and grandparents,” reported Bloomberg. Still, retirement is square on the mind of millennials who say it is their top priority, even if they can’t make any moves toward it. In fact, a recent Charles Schwab survey found that when asked about financial priorities, millennials put saving for retirement far ahead of student loans, credit card debt, and job security. Still, even though millennials are worried about retirement, they aren’t saving for it. And most are not taking advantage of their employer’s 401(k) program.
According to T. Rowe Price Retirement Plan Services, which runs 401(k)-style plans for nearly 1.9 million people, just 30 percent of young workers sign themselves up for their 401(k) plans. For some, the paperwork is too time-coming so a few companies automatically sign up workers for 401(k)s, and in these cases among 20-something workers, 84 percent go along with being auto-enrolled in a 40(k) plan.
So when millennials have someone else doing the legwork, they are actively participating in retirement plans. But if left on their own to enroll and do the paperwork, many of them, like me, just aren’t doing it. Where do you stand?