Many Americans are not saving enough money for retirement, or even enough to have a cushion if they face an emergency or incur unforeseen expenses.
According to a recently-published study by Schwab Retirement Plan Services, only half of those surveyed said they were contributing to their company’s 401(k) plan, and some of those weren’t even completely certain whether they were or not.
The most common reasons that people gave for not saving for retirement were credit card bills and other monthly expenses. They said that they simply had no money left to put into savings after paying their bills.
Even consumers who place part of their paychecks into their 401(k) often don’t contribute enough to build a solid retirement fund. It’s best to contribute at least as much as your employer’s contribution, which is free money. However, experts say that workers should set aside at least 10 percent of each paycheck for retirement, regardless of what their employer matches.
Those who reported that they were saving for retirement seemed to be living within their means and not going into debt to maintain their lifestyles. One concerning statistic from the study is that almost two-thirds of those who said that they didn’t save still thought that they were financially in good shape.
Some credit card debt may be unavoidable. However, if you get into the habit of using your credit cards for basic expenses such as groceries, gas and utility bills, and aren’t able to pay off the balance each month, you can find yourself in serious debt. Further, much of that debt is used to pay interest.
If you are getting deeper into credit card debt and you don’t see a way out, you might decide to consult with a New Jersey bankruptcy attorney to find out what your options are for regaining control of your financial life.
Source: Forbes, “New Report Shows Credit Card Debt Is Hindering 401(k) Savings,” Jamie Hopkins, Aug. 24, 2017