Don’t talk yourself out of planning, saving for retirement

I’m a huge fan of feel-good stories, happy endings and good fortune. So the Employee Benefit Research Institute’s 2012 Retirement Confidence Survey, published this spring, was far from my favorite read. This survey is a kind of “state of retirement planning” document that comes out each year and is filled with a host of statistics.

This year’s results make it clear that “retirement” and “confidence” resemble oil and water more than peanut butter and jelly in America today. Here are a few gems from the survey:

- 60 percent of workers have less than $25,000 in savings and investments.

- More than half of workers have not tried to determine how much money they will need for retirement.

- Only 14 percent of workers are very confident in their ability to retire comfortably.

Not exactly a story headed for a happy ending. So it’s time for you and me to encourage ourselves, our children, grandchildren and anyone who will listen to turn this ship around by championing four basic principles:

Start now. There are always valid reasons for not putting away money for retirement. Reframe the question this way: Why should I be saving for retirement? The above-mentioned statistics alone could be motivation enough, but maybe spending some time envisioning what you would like your retirement to look like can help get your savings efforts started.

A little goes a long way. If you or someone you know are still decades away from retirement, contributing just a few dollars each month can add up to thousands or even hundreds of thousands in savings by retirement. But no matter where you are on the age spectrum, it all matters. As one of my multiple retirement-savings efforts, I add $50 each month to government I-bonds. My thought is that each addition represents a dinner out with my wife.

Let Uncle Sam help. Tax deductions, tax credits and tax-deferred growth are all part of the package the federal government offers to those who commit some of their hard-earned dollars toward retirement. Take advantage of these incentives and encourage others to do the same.

Leave no free money on the table. I’ve personally met hundreds of individuals who don’t take advantage of free money offered by their employers through matching contributions in work savings plans. Take advantage of the free money.

Look in the mirror, within your circle of family and friends, or around the workplace or neighborhood, and encourage the people in your sphere of influence to get in the retirement-savings game. No one is going to do it for us, so let’s do it ourselves.

J.J. Montanaro is a certified financial planner for USAA, The American Legion’s preferred provider of financial services. Submit questions for him online.

This material is for informational purposes. Consider your own financial circumstances carefully before making a decision and consult with your tax, legal or estate planning professional.USAA means United Services Automobile Association and its insurance, banking, investment and other companies. Banks Member FDIC. Investments provided by USAA Investment Management Company and USAA Financial Advisors Inc., both registered broker dealers. USAA Financial Planning Services® refers to financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California), a registered investment adviser and insurance agency and its wholly owned subsidiary, USAA Financial Advisors, Inc., a registered broker dealer. Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and Certified Financial Planner TM in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.