Mellody Hobson talks about preparing for retirement on today’s “Money Mondays” segment.
I know it’s something I talk about a lot, but retirement is the MOST important thing Americans will ever save for—more important than home ownership or their kids’ education and definitely more important than summer vacation.
More important than education?
Absolutely. It’s funny to me how many people are surprised by this, but you MUST make your own retirement a priority above paying for your kids’ education. Here’s the reason: While there are a multitude of scholarships and loans available for college students, there are no scholarships for retirement. Your children will have their whole careers ahead of them to pay off loans, whereas you may putting yourself at financial risk—and ultimately, your kids—if you delay saving for your own retirement.
I like to describe it like being on an airplane when the flight attendant explains how to use the air mask, and that you need to secure YOUR air mask BEFORE you attend to a small child. First, get on track for retirement, then you can think about funding little Johnny’s college plan.
And the reason I want to talk about this yet again is that I’ve just seen some very unsettling statistics. Americans are not saving enough for retirement. Not by a long shot.
How bad is it?
It’s really bad. According to the Employee Benefit Research Institute, only two-thirds of Americans have saved for retirement and most have saved less than $25,000. The average retiree depends on Social Security for 70% of his or her income.
Unfortunately, Social Security just isn’t equipped to fully support our ever-aging population. There are 78 million baby boomers edging toward retirement. Keep in mind when Social Security was launched in 1940, a 21-year-old male had a fifty-fifty chance of living to the age of 65. Today, that same 65-year-old who had a 50/50 chance of being six feet under now has the same mortality and health as a 54-year-old did in 1947. And better health means a longer lifespan: a male reaching retirement age in 2013 is expected to live to an average of 85, a woman to 87.
You’re not suggesting that our elderly are living too long, are you?
Of course not! Certainly, everyone wants Granny to live to be 110, but it’s my job to make sure she has enough saved to do that comfortably. Experts say that a retirement crisis is looming. Before “too frail to work, too poor to retire” becomes the refrain, we need to change the way we’re approaching saving for retirement in this country. First, we need to get the message out that Social Security is not a pension plan—or even a retirement program. It’s a supplemental retirement program. Next, we need to help people get back on track. Many people saw such staggering losses in their retirement accounts during the financial crisis that they said their 401(k) plans had been reduced to “201(k)s.” It’s disheartening, but it’s never too late. My first order of business: Don’t panic. Next: Start saving as much as you can, max out that 401(k)—enough to get any employer match—that’s free money, and finally, cut superfluous spending.
Most of all, I would encourage everyone NOT to try to time the market. A great way to think about investing is to equate it with driving on a highway during rush hour. It always seems that the lane I’m driving in moves the slowest. Then, when I switch into what I think is a quicker lane, but it slows down and the lane I used to be in starts to move more quickly. The same thing happens in investing … certain sectors will be out-performing while others will be underperforming as a result of certain market conditions. So, rather than trying to chase the hot performers, you should have your money spread across a variety of investments—such as value, growth, index and international stock mutual funds—so that you can benefit across all market cycles over the long-term. Think of it like keeping a car in each lane. When it comes to long-term goals like retirement, the key is time IN the market, not timing the market.
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This Week’s Celebrity Instagrams (11/26-12/2)
30 photos Launch gallery
1. Little Legend and Puddy 😍😍😍😍
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2. "You on point Phife?" "all the time,Tip". 💥 #bannedfromnormal
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3. Vegan! The Impossible burger at Crossroads
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4. Lawrence #BeforeandAfterEpisodes 1-4: 184lbs 13% body fatEpisode 8: 196lbs 8% body fat S/O @coachdaveboxing with the works outs and @kildareriordan with the nutrition
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5. Jus haaaanngin out
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6. Meanwhile back at home in Atlanta GA someone mad they not on the 🛳. 😳
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7. No limits... Photo cred: Chris Bridges @ludacris
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8. new new
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9. Apparently my 260lbs is too much for the actual vines in the Hawaiian jungles to hold me without breaking and me falling hundreds of feet. So for safety purposes, I'm forced to swing thru #Jumanjj on wires strong enough to hold 12 adult buffaloes and 1 adult Rock. #OnSet #Jumanji #IronicallyIEatBuffaloDailyForLunch #MoreManThanNatureKnowsWhatToDoWith
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10. hey ma! 🎎#wcw 💙
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11. Surprise visit to our factories!!! #GoodAmerican #USA
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13. Peachy Keen 🔥✨⚡️
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14. If this don't look thankful I don't know what does. Happy Thanksgiving to you and yours. #UltraBlessed #24kMagic #SweetPotatoFly
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15. Late nights @nbcmarlon with the writers... we in here!!!
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16. There goes my baaaaaaaaabbbbyyyyy #QueenKingMagic!!! We're up to something! Ira BIG!!! Stay out our buisness -
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17. You want to win every game you play but when you come home to these faces... who cares. #ILoveYouGirls best part of my day, everyday!
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18. Steady,steady..... full size jenga.. "I got this one "???? Or do I ?
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19. Cornrows kind of day 😉@dontaysavoy2 you convinced me and I love. ❤️️
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20. #BrotherlyLove #tbt
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22. #basel #TeamLOVE @kingcombs
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23. Just introduced a special screening of @directher 's groundbreaking (must see) documentary @13thfilm with my brother @themichaelealy | @unitedblackout #blackoutblackfriday
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24. Me & Vanessa Williams giving #DuckLips #Pose on the set of #DaytimeDivas @vh1 - Coming Soon to a tv near you. Lol. - My make up done by @makeupsurgeon
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25. This picture just makes me wanna praise the Lord, you hear me!!!!!! Yes Lord brotha #TEDDYCAMPBELL What a #man !!! You are everything right on this picture husband ......... #gorgeous #stylish #classy #strong #masculine #king #sexy #debonair #gentlemenstyle And that #bible in your hand just seals the deal for me (probably cause i know that, that is what helped you become just as amazing as you look😘). While my heart and mind experiences the goodness of God at #church on Sundays, my eyes experiences the goodness of Teddy😍. Amen somebody🙌🏽. "Bless the Lord oh my soul and all that is within me bless his holy name" #myman #myhusband #goodman #blackman #dapperman #godlyman #goodfather #mybestfriend
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26. Yesterday was my mama's 53rd birthday!!!!! Got to celebrate with her all day. If this is what I have to look forward to I can't wait. Looking like a soft bucket a cocoa butter. Yaaaaaaaaaas! 😍😍😍 love you mommy!
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27. "Shout out to @PureAtlanta for getting the family right"....I'm loving this jogger. 😍😍
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28. This pic warms my heart ❤️ #myLogiebeans and aunt aunt umba @itowandabraxton 😘
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29. You will always be my baby😜. #HappyBirthdayReginae #mybaby18
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30. GC "Gods Child" Red on Red SweatSuit available now at www.MonicaApparel.com ... Take Your Crown wherever you go!! I'm pictured in a Medium... Go to the site now for other options ... cc: @trukernell
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