In case you’ve forgotten, it’s National Save for Retirement Week

By Dian Vujovich

If you’re at all like me, you may have forgotten that the third week of October is National Save for Retirement Week. It extends from October 21st to October  27^th, this year.

The week received its designation when two Senators, Gordon Smith (R-OR) and Kent Conrad (D-ND), introduced a resolution meant to encourage folks to participate in their employer-sponsored retirement plans. The simple resolution (S.Res.550 (109th)) was passed on September 13, 2006. Remember? Didn’t think so.

The importance of this week almost passed me by and of course there is no excuse for that.  Then again, there may be one: When given the choice between spending and saving for retirement, saving doesn’t always come out on top when there are all sorts of electronic gadgets and i-type things to buy—although it ought to.

Okay, that’s really not an excuse but a bit of social commentary to which I’ll add: Knowing what I know now about how time impacts  things like the cost of living, inflation, the jumpiness of interest rates, fluctuations in prices of the various markets and taxes —combined with the hunormous cost of health care and retirement —I’d suggest every mom and/or dad open a retirement savings account for their child the day after they’ve gotten the little darlin a Social Security number. Really.

If you happen to be one of the very wise who  at an early age was taught how important saving a chunk of your weekly, monthly or annual income was for your future and got into that savings groove, kudos to you. Please, go out and teach others how to  do that.

On the other hand, if you happen to be one of the 44 percent of households that EBRI research has shown will not be able to meet their basic needs during their retiring years, those golden years might not hold the dreams and expectations you’d hoped for. Even when the sources of income included a combo of savings, Social Security, pensions and housing equity, that percentage of households came up short.

Looking at other stats from the 2012 Retirement Confidence Survey from EBRI published earlier this year, 66 percent of workers said that they or their spouses have saved money for retirement. Trouble is, most of them haven’t saved much: Of that 66 percent, 60 percent have less than $25,000 in total savings with 25 percent having only between $1,000 and $9,999.

Also included in that survey was info regarding how much money folks thought they’d need to have saved to retire comfortably. Thirty-five percent thought they’d need at least $500,000; 18 percent figured between $250,000 and half a million would do it; 34 percent estimated they’d need less than $250,000.

Let’s do some pretending here. If one were to live 30 years in retirement and had $500,000 saved and decided to spend every cent of it and not invest any throughout those years, they’d have about $1,3888 coming in each month. (500,000 divided by 360 (no. of months in 30 years)

If the savings amounted to only $250,000, the monthly income would be $694. You can’t go far on that. (Again, no investing of that total dollar amount was figured in.)

Add in a Social Security check or two and one’s retiring financial future looks a bit better. Throw in a hefty inheritance or out-of-nowhere windfall and the picture gets brighter still. Too bad neither of those can be counted on.

Not long ago I wrote about the fiscal cliff. But the cliff I was addressing was your own personal fiscal cliff pointing out that that’s the one that counts the most.

If there’s one question everyone needs to ask themselves during this National Save for Retirement Week it is: How on target and secure are your long-term savings/ planning for retirement efforts?

The answer you get could change your life.