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Two-thirds of Americans don't save enough

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It's a bad decision because this is the money that has 40 years to grow. Once you make a commitment to retirement savings, you take a big tax hit if you access those funds prematurely. Keep the money invested. Avoid the temptation of cashing out. Instead do a trustee-to-trustee transfer to a traditional IRA or your new employer's 401(k) plan.

Didn't get an early start to retirement savings? Don't shrug your shoulders and say, "Well, it's too late for me." It's going to take more discipline in managing your spending, ramping up the percentage of income that goes toward retirement, paying attention to investment choices and managing investment costs. But that's what you must do.

Bankrate wanted to measure the attitudes Americans have about saving for retirement. The verdict: More than half of Americans -- 54 percent -- at least sometimes avoid news or information about how much people need to save for retirement. Why? Because it's discouraging. Some 28 percent say they always or often tune out this type of news. But 43 percent say they rarely or never avoid this information.

The ostrich reaction
Remember when the stock market sold off in the early part of this decade? Many people stopped opening their brokerage statements because they didn't want to see how much money they lost in that tumultuous time. I wanted to call this the "ostrich defense" until I saw how widely that term was used during the trials of Enron executives.

Tune out retirement news?

You need yardsticks to evaluate how well you've done to date and what you should aspire to save for retirement. True, there is a lot of conflicting information in this area but that's no reason to tune it out.

The Bankrate feature "Savings rates for a secure retirement" offers some rules of thumb about how you can incorporate both your current income and savings to determine if you're on track with your retirement savings goals. Check out Bankrate's retirement savings calculators as well.

Take charge of your retirement
But don't leave everything on automatic pilot indefinitely. Even with target retirement date mutual funds or lifestyle funds, there is no "set it and forget it" approach to investment choices. You'll want to monitor the costs of investing in retirement accounts by considering account fees, asset management fees, sales charges and marketing fees.

And don't just figure that you can postpone retirement so that you won't need to save as much for it. People that love their work don't want to stop working just because they've reached an age when they can retire. Sometimes health issues or a corporate restructuring can derail the deferred retirement solution to the savings problem.

That's why it's a good idea to plan for the worst and hope for the best -- by making retirement savings a priority in your current monthly budget. Get a grip, America, on a retirement savings plan that will help you enjoy your retirement.

Bankrate.com's corrections policy -- Posted: Oct. 1, 2007
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