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U.S. Employees Aren't Saving For Retirement, Busy Buying Food Instead

A new ING Retirement Research Institute survey finds American employees aren't maximizing their 401(k) contributions.

The majority of those surveyed told ING that well yes, they could increase their 401(k) contributions today by 3% of their salary but, well, they're not doing it.
According to the findings, a majority of workers (87%) said they could be saving more in their employer-sponsored retirement plan, a savings vehicle they deem critically important to reaching a secure retirement and the foundation of most their retirement savings strategy. In fact, of the 1,000 workplace retirement plan participants surveyed, nearly two-thirds (64%) said their employer-sponsored retirement plan accounts for all or most of their retirement portfolio. However, many participants are not stretching to maximize their contributions when they can. Moreover, they tend to rely on "guesswork" when setting contribution levels, and don't fully understand the importance and long-term impact of small increases in contribution rates.

Hmm, I wonder why employees aren't bumping up their 401(k)s contributions right now. The worst recession since the 1930s, perhaps? A fear that they could lose their jobs at any moment and will need savings that don't come with a hefty financial penalty? Curiously, the survey doesn't seem to delve much into these very real-life matters, but the state of the economy dictates that employees focus more on today than tomorrow. People are trying to stay on top of bills that keep going up, and they're trying to keep a bit of cash on hand for life's little emergencies. After all, you never know when the roof might start leaking or you might have to pony up $20 for your child's PTA-sponsored fundraiser so the school's art, PE, music and science programs don't shut down. And these days, there's a PTA-sponsored school fundraiser every other week. It's hard to keep up.

For us Gen Xers, planning for retirement in the Great Recession is a bit like the Europe song "The Final Countdown." Maybe the economy will come back to earth, who can tell? I guess there is no one to blame. Will things ever be the same again? Cue the bombastic synthesizer, and the YouTube clip. Yes, I've been waiting for an excuse to use this video. I think it's a good metaphor for the times we live in: Tone deaf, offbeat and you just can't wait for it to be over.

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