Sowell found improving outcomes meant there would be less need for a program. Less need meant less demand for state programs and jobs. In my last article for Forbes, I covered the OregonSaves pilot initiative to force all employers who do not offer a retirement plan to enroll employees into a state-managed Roth IRA consisting of an S&P 500 Index Fund, a Money Market Fund, and Target Date Retirement Index Funds from State Street Global Advisors (SSGA). The investor who selects the money market fund will have seen no or low returns over the last year. Outcomes are not improved. Outcomes are not improved. Federal savers are showing the right behaviors by saving. The same mistakes are seen every day by those of us working with those retiring, forced into retirement, or hoping they can ever retire. I’m not expecting much from the experts on addressing the future harms that this and the future state plans will cause, however. And so my best advice is that if you find yourself enrolled in OregonSaves or a future state-run investment account, contact a financial advisor.
Given how lousy most Americans are at saving money, just about everybody could benefit from having more retirement savings — particularly the female of the species. Women live longer than men, so we’re likely to have longer retirements — meaning the money has to stretch a little further on average for women than for men. Yet because the average salary for women is lower than the average for men, it’s difficult to save even as much as our male counterparts do.
Difficult, but not impossible. Consider these tips for supersizing your savings — whether you’re a man or a woman.
Set a savings goal
Take the time to calculate what your likely expenses will be in retirement (taking into consideration the plans and activities you have in mind), then use the estimated expenses to figure out how much money you’ll need to have by the day you retire. But if you just don’t want to spend the time and energy it takes to build a really realistic retirement budget, there are some quick and dirty estimation tools that you can use to come up with a number instead.
Many experts suggest contributing 15% of your income to your retirement accounts. Assuming you’re still at least a couple of decades away from retirement, that savings rate may suffice. However, if your last day of work is less than 20 years away, then you should save more aggressively.
Another option is to pick a savings goal based on the average retiree’s needs. One study estimated that the average retirement costs $738,400 — but remember, that’s the average cost in today’s dollars. If you have many years to go before retirement, inflation could increase that number drastically.
The best way to produce a savings goal is to factor in your expected costs, income, and lifespan. However, even an arbitrary goal is better than nothing. Want to aim for a high, round number like $1 million? Go for it. After all, you’ll never reach your destination if you don’t know where you’re going.
Pick a contribution amount
Once you have a savings goal,…