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Putting away for retirement
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December 4, 2000: 6:06 a.m. ET
Most Americans are saving for the big day. They're just not saving enough
By Staff Writer Jennifer Karchmer
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NEW YORK (CNNfn) - You've signed up for your 401(k) plan at work so you consider yourself a diligent saver. Those automatic deductions from your paycheck will really add up, but are you keeping track of your savings? And will it get you where you want to be in retirement?
Most Americans are indeed saving. They've heard time and time again how important it is to take advantage of their company plan and to do some saving on their own, because Social Security alone won't be enough for the big day. But many investors are saving haphazardly without a plan, according to Don Blandin, president of the American Savings Education Council (ASEC).
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Any way you cut it, we are still not really good at saving."
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Don Blandin
President
American Savings Education Council |
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"More Americans are focused on saving for retirement, but are they putting away enough?" Blandin said. "It's not grounded in a plan and they're saving blindly. They really don't know if they're saving enough."
So the American Savings Education Council is teaming up with the Social Security Administration, the Employee Benefit Research Institute (EBRI) and other organizations to promote savings.
Campaign to save
The "National Save for your Future" Campaign, which begins in September 2001, will urge investors not only to put away as many pennies as possible for retirement, but also to first figure out how much they will need during their golden years.
Beginning next year, September will be deemed "Saver month," since Americans typically return from summer vacation, children are going to school, and it's a good month to get people's attention, according to EBRI spokesman Danny Devine.
"Any way you cut it, we are still not really good at saving," Blandin said of American's saving habits. "In addition to 401(k) programs and others, we should be saving separately for the future and building up slowly a contingency fund for the future."
Did you miss CNNfn.com's Special Retirement report? Click here...
In a recent study by the Financial Planning Association, more than half of the investors surveyed say they are troubled about their retirement savings. The study shows that Americans aren't saving enough for their golden years and, on top of that, investors say a handful of reasons are holding them back from putting enough pennies in the piggy bank slot.
Forty-six percent of the investors questioned in the survey said mounting everyday expenses overshadow their long-term savings. In addition, 37 percent of the respondents said living an extravagant lifestyle was a barrier preventing them from saving for retirement.
"If you're doing retirement planning you realize it's a long-term venture," Blandin said. "If you have some extra money, now is the time to buy something for 20 years form now."
How to make a plan for the future
Amid the bad news that many people aren't saving enough, the good news is that you can take matters into your own hands.
It's time to figure out a ballpark estimate of how much you'll need during retirement and where your income will come from. For many, that means an employer-sponsored plan, an IRA, a company pension, Social Security benefits, and any additional savings.
Click here for practical tradeoffs to help you save
You'll have to envision how you plan to spend your days in the golden years. Will it be traveling around the globe or working part-time in the same town you grew up in? The answers to these questions will help determine how much money you'll need.
Answer these questions to find out how long you're going to live!
Get into the routine of saving
Now that you've got a rough calculation of what you'll need for retirement, you can take some steps to savings.
Create automatic savings deductions of $25 or $50 per pay period from your bank checking account or directly from your paycheck, if possible, into a mutual fund.
Also, contributing to your company's 401(k) plan is a great way to do regular deductions. The contributions are taken automatically from your paycheck so you don't need to write a check or keep on top of it. You'll receive a quarterly statement on your plan's progress.
Many companies offer online account information, so you can view your holdings as often as you like. And contact your company's human resources department to check if your company offers a match and how much you need to contribute to receive the full benefit. 
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PLANNING FOR RETIREMENT
