Zilch?

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It seemed like a normal day. I was simply riding in an elevator. There was the stereotypical older, corporate-looking gentleman who was clearly running late and giving off a slight aroma of coffee grinds and cigarette smoke. The friendly-enough looking lady who had just finished her morning jog, but was completely engrossed in her smartphone, was also present. With these two characters to choose from, who could really blame me for going with the always-safe, silent elevator ride approach? Luckily, as we zoomed upward into the Atlanta skyline, there were some news headlines scrolling across the bottom of a small television in the elevator to save me from my momentary imprisonment. Then I saw a most disturbing headline: "Survey: 49% of Americans not saving for retirement." Say whaaaaat?

As the bell chimed and the doors to the elevator opened, this horrified financial planner raced to a computer. As much as I would like to report to you that the disastrous news in the elevator was fiction, it was not. I quickly found an article on CNNMoney titled "49% of Americans saving zilch for retirement" that seemed to confirm my fears. Not only did the article say 49% of Americans are saving zilch, but it also stated that 56% of people ages 18-34 are currently not contributing to any retirement plan. Worst of all, the article reported that almost 50% of people aren't even planning on contributing to a retirement plan. I cannot reiterate enough that in today's world, YOU CANNOT AFFORD NOT TO BE SAVING FOR RETIREMENT!

Retirement, "schmetirement" you say? Are you willing to bet that you will have a nice pension or can live off of Social Security? You'll start saving for retirement when it gets closer, right? Well that's at least what 49% of our peers are evidently saying! They don't realize that when I tell people they need to save for retirement today, it is not a polite suggestion. If people don’t save for retirement, they may never be able to retire! Simply put: If you ignore reality and do not make the necessary sacrifices to save for retirement now, you will most likely die working, because you will have to.

It's because of these strong feelings and convictions that I want to share with you a high-level view of the short-term and long-term plans you need to follow in order to secure your financial future, and your retirement chair at the beach.

Short-Term Retirement Plan:

• Start building up your savings- $25 a month, $100 a month, $500 a month… It doesn’t matter how much at first; it matters that you are starting a habit. Work towards a cash reserve of 6 months’ worth of expenses.
• Pay off your credit cards- Make all the minimum payments on all your debts you have to in order to avoid late fees and protect your credit score, but also start hacking away at any credit card debt you may have. Once you pay off all your credit cards, make sure you keep them paid off every month.
• Start saving for retirement- Start contributing to your employer’s retirement-savings plan. Put in what you can afford, but make sure you are taking full advantage of any company matching. If your employer doesn’t have a plan, open your own IRA with a wealth management firm or someone like TD Ameritrade or Fidelity.

Long-Term Retirement Plan:

• Keep on saving- Replenish that 6-month cash reserve after your emergency dental surgery or car problem. Work towards 12 months’ worth of expenses.
• Pay off debt- Look up all the interest rates on all of your student loans, car payments, house payments, home equity lines of credit, etc. Order them from highest to lowest. Make regular payments on all of your debts, but direct all of your excess cash flow at the debt with the highest interest rate. Once that debt is gone, move on to the next highest. Being debt-free lowers your living expenses and gives you a sense of security.
• Keep saving for retirement- Prudently increase your contributions to your employer’s retirement plan. Start contributing to an IRA if you haven’t already. Think two words: nest egg.
• Make sure you have adequate insurance- You need to have a back-up plan in case you get hit by a falling refrigerator or lose a fight with a wood chipper. See what disability benefits you have with your employer, but go ahead and ask your car insurance/homeowners insurance provider(s) about life insurance and disability insurance. You especially need to consider these unlikely and unpleasant scenarios if other family members are depending on your wages.

Please plan for retirement so you're not part of the 49%, I beg of you. Follow the short-term and long-term principles I outlined above, and I can almost promise that one day you will be well on your way to a comfortable retirement.

Finally, friends don't let friends not save for retirement. Please pass these principles on to people you know who need them.

Well I’ve got to run. After that elevator ride, I think I'll take the stairs! 

-Tom