If someone asked you how prepared you are for retirement, what would you say? If your answer is, “What retirement?” don't worry, you’re in good company.
The good news is about half of your age group is in the same boat, so it’s nothing to be embarrassed of. The bad news is, this is the highest percent of any age group. Normally you would associate worrying about retirement with folks who are actually near retirement age, but the Great Recession has caused a shift in attitude, and in wealth.
While people older than you and younger than you managed to make it out of the recession relatively unscathed (some are even better off now) people between 35 and 44 were the economy’s punching bag…and stress ball…and comfort food. According to a 2012 Pew Research survey, in the past 10 years, median wealth of households headed by adults 35 to 44 years old has dropped by 56%, which means your median wealth in 2010 was $56,029 less than the median wealth your same-aged counterparts had in 2000.
And just because the economy likes to kick people while they are down, this group not only lost the most wealth of any age group, but also failed to benefit from the Great Rebound in stock prices beginning after the recession ended three years ago. 35 to 44-year-olds got out of the stock market between 2001 and 2010, and therefore was on the sidelines as stock prices began to increase in 2009.
So you lost the most, made back the least, and now you have to deal with the millennial generation and all their trophies. But enough of the depressing news, let's move into cheerier territory. Don't give up on your retirement because the last few years have been bleak! If any of the above hit home with you, now is the best time to start taking retirement seriously. According to an article by USA Today money put away 45 years before your planned retirement date, at 8%, will be worth 32 times what it was when you put it in, and for every 9 years you wait, if your money is earning 8%, your retirement account will be halved. So basically, I'm saying you should start now.
Plus, don't forget your company's retirement programs. If you work for a company that has one, use it! If they are going to match what you put in, that’s free money. Retirement money isn’t something you want to gamble with, so set up retirement payments to be taken out of your check before you ever see it. You'll adjust after a paycheck or two and won't even notice after that.
Also, make sure to plan for how long you will need the money. Nobody wants to be half way through retirement and run out of money. A good way to plan for your money needs is to meet with a financial advisor. Before you go out and hire a private accountant check with your bank or credit union. Many financial institutions offer financial advising to qualifying members for a reduced cost or even free.
With small some small changes and a little resolve, planning for retirement is a lot less daunting. Don’t get discouraged by the amount you can put away right now, it will grow. Try to make a goal to put a little more away each month, until you reach the amount you and your financial advisor have set to protect your future.