Retirement Blog

Finance Blogs » Retirement » Ducking poverty a good reason to save

Ducking poverty a good reason to save

By Barbara Whelehan · Bankrate.com
Friday, February 28, 2014
Posted: 2 pm ET

Do you get a nagging feeling when you procrastinate doing something that needs your attention?

I recently noticed that dust has accumulated -- again -- along the perimeter of the carpeting in my home. You know -- the space where the carpeting meets the wall that you can't get with the vacuum cleaner? It may not be noticeable to others, but it's really been bugging me. For weeks I've been meaning to get out the vacuum cleaner, attach the relevant part to the hose and just take an hour to suck up the dust. Now that my brother is coming to visit in March, I have incentive to get this job done soon.

Inertia is a powerful force, but it can be conquered.

This week is America Saves Week. Led by the Consumer Federation of America and the American Savings Education Council, it's a time when the financial industry attempts to raise our awareness of the importance of setting aside a portion of our income.

My inbox is filled with statements about America Saves Week from various financial organizations, including the Independent Community Bankers of America, the National Foundation for Credit Counseling and the Employee Benefit Research Institute, or EBRI. Even Comptroller of the Currency Thomas J. Curry issued a statement of support:

"I'm proud of the role that national banks and federal savings associations play in helping Americans build the savings they need to improve their lives -- to buy homes, put children through school, prepare for retirement and set aside money in rainy-day funds that are so important when unexpected emergencies crop up."

Incentive to save

If you haven't already done so, what would motivate you to set aside 10 percent to 15 percent of your income toward retirement?

For me, it was the presentation by two brokers at a Women In Communications luncheon I attended when I was in my early 30s. When you're young, you don't think about retirement. But these two women brought it home when they said, "Women who don't save for retirement throughout their careers can end up living in poverty."

In this country, poverty is something that can be avoided with a little retirement planning.

Today, about 11 percent of women age 65 and older live in poverty, according to the Census Bureau. I have a friend who lives in poverty. It's not a pretty picture.

Things happen when people get older. Some develop health issues. Others lose their jobs and have trouble finding another source of income. It's good to have a nest egg to fall back on in the event of an unforeseen development.

I asked a retirement expert this question: What's the single most important message that Americans need to hear to prepare for retirement?

"I would say that you need to prepare for retirement, and prepare with an awareness that you don't always control the when or how of it," says Nevin Adams, director of the American Savings Education Council and co-director of EBRI Center for Research on Retirement Income.

***

Follow me on Twitter: @BWhelehan.

Barbara Whelehan is a co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters. It is available at Amazon, Barnes & Noble, iBookstore and other e-book retailers.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
3 Comments
Jenny
March 02, 2014 at 11:01 am

By the way, higher savings rate at the banks won't hurt either. It used to be that you could get decent returns on cds at the bank, these days it looks like that is gone, meanwhile banks are charging higher fees on money, higher interest rates on credit cards, etc. meanwhile paying less and less money to the customer in the form of savings interest rate. It's not like when greenspan ran the monetary funds, what a difference, meanwhile when President Obama took office one of his ideas was that people should try to save more, well, give us more incentives, even us savings bonds are no longer worth buying at such low rates.

Freddy K
March 01, 2014 at 12:10 pm

I don't think there is an option. Everyone must save for retirement if they are able to. With 401Ks this can be done automatically. Social Security will provide only about 30% of what you will need. After that it is up each individual. Great if you are one of the lucky few with a pension, however those are disappearing fast.

Jan Browne
March 01, 2014 at 12:56 am

The question you ask of people, "what would get them to save money?". Why, To make more money than the poverty level! Do you think the majority of Americans went to college? No.

Add a comment

(Comments may take 5-10 minutes to appear)