Americans aren’t doing a particularly good job saving for retirement. In fact, a new survey released this week found that the typical family has saved $25,000 or less for their golden years.

Do you dream about retirement? Do you imagine frolicking on a beach? Traveling the world? Golfing the finest courses? Spending time with your grandchildren? What you probably don’t do is imagine you’ll be working into your 70s. But that’s exactly what might happen if you don’t start saving for your golden years.

“Forty percent of Americans aren’t yet saving for retirement,” says Dallas Salisbury, Employee Benefits Research Institute.

And those that are have saved just a fraction of what they’ll need.

“A good rule of thumb is 10 to 15 percent of your income should be deferred until your retirement. If you do that, over the course of a working career of 35 to 40 years, you should have enough to retire comfortably,” says Daniel Houston, Principal Financial Group.

But with savings of just 1 to 2 percent per year, the average American family is a long way from saving that kind of cash. It’s not that they don’t want to save, but something always seems to come up.

“There’s always going to be one of those excuses, either you’re just newly married or you’re paying off college tuition loans,” Houston says.

But experts say there is waste in every budget. So start cutting back on your spending slowly.

“When you have a salary adjustment, take a generous portion of that and start deferring that,” Houston says.

If you don’t know how much you need, go to the web. has a ballpark budget calculator that will help you figure out exactly how much cash you’ll need to retire. Once you’ve got your savings plan in place, it’s time to work on investing for the future. Keeping your money in cash isn’t going to cut it.

“I would recommend that they diversify their portfolio by style, by manager, by asset class,” Houston says.

Some stocks, some bonds and some real estate are a balanced approach to investing for your retirement. Unless you want to work the rest of your life, which is what some have concluded they may have to do.

April 8, 2004