According to a new national survey, just 13 percent of Americans feel "very confident" they will have a comfortable retirement. That's a record low. At the same time, a record 27 percent of Americans report they are "not at all confident" in being able to save their way toward a comfortable retirement.
That's two sides of the same troubling coin. What should be a life stage that we look forward to has become a major source of anxiety instead. I hear it in your voices and see it in your faces when you talk to me. Your fears about being able to retire comfortably and with dignity are weighing you down. It's hard to enjoy the present when you're worried about the future.
That's no way to live.
I have no quick or easy fix to offer, but I do have a way forward.
Stand In Your Truth
You probably think your retirement hinges on a multitude of financial decisions -- choosing the right asset allocation for your 401(k); figuring out if you should convert to a Roth IRA; deciding whether to pay off the mortgage before retirement or focus on saving more. Those are indeed all vitally important issues to navigate. But even more crucial to putting you on a more confident path is the singular act of standing in your truth -- that is, taking a fresh accounting of where you are at today, and where you want to be 20, or 30 or 40 years from now.
Sound simple? Well, not based on my experience. When I ask people how much they have saved for retirement in their 401(k), they typically start by saying, "Well, before the crash..." Or when I ask someone what their house is worth, the response I get is something along the lines of, "Well, we paid..." or, "Back in 2007 it was worth..."
I didn't ask what you had in the past. I asked what you have today. It is only when you are willing to take a clear-eyed look at where you stand today that you can build a more secure future.
Live Below Your Means But Within Your Needs
The single most common lament I hear when it comes to retirement is, "I wish I could save for retirement, but I just don't have the money left over at the end of the month to invest." My reply: If you can't afford to save while you have a paycheck coming in, how are you going to be able to pay the bills when you retire? Don't expect Social Security to do the heavy lifting for you; the current average retirement benefit is less than $1,200 a month. If retirement comfort is what you're after, Social Security should be seen as a complement to your personal savings, not a total solution.
And to generate those savings, you need to find a way to live below your means, so you in fact have some money each month that can be saved for your future. If that seems impossible, I think you are still a few steps short of standing in your truth.
Take Care Of Your Kids By Taking Care Of Your Retirement Needs
There is simply no bigger gift you can give your kids than the assurance that you will in fact be financially secure when you retire. If you're currently in a position where you are helping out your parents, or are worried about their security, I imagine this is abundantly clear. But are you doing your very best to make sure your own kids will not have the same worries and responsibilities?
This is never my most popular advice, but it is in fact my most important: Make saving for your retirement your priority. If that means your child attends public school rather than private so you can focus on your 401(k) and IRAs rather than tuitions, that's the honest move to make. If that means your child attends a less expensive college because you don't save as much in a 529 plan, or your child has to rely on federal Stafford loans and financial aid, so be it. An affordable college education is one that does not derail the parents' retirement savings.
Find The Pleasure In Saving
If all that sounds like drudgery, I think you're missing a great opportunity to shed layers of financial anxiety. There is no question that saving more today means spending less today. There's no way around that simple fact. But rather than see this as an exercise in denying yourself spending pleasures, what if you managed to find an equal pleasure in saving? After all, it is the saving you can manage today that will put a comfortable retirement well within your reach.
Suze Orman's new book, "The Money Class: Learn to Create Your New American Dream" (Spiegel & Grau), includes more than 100 pages of detailed strategies to boost your retirement confidence. Learn more about Suze at www.SuzeOrman.com.