Retirement may be years away for those in their 40s. But it’s a prime time to sock away for the future. Take Aaron and Suzanne, a couple with two young children and adopting a third. They want to buy a home. They also want to save for their retirement, as well as for college for their kids. But saving is difficult, as Aaron is a self-employed farrier who works just nine months a year. Suzanne is unemployed.
In an appearance on the syndicated talk show Dr. Phil, AARP retirement expert Jean Setzfand tells the couple that it’s good that they’re thinking about their financial future now, as they have time to get started on a long-term savings plan.
The Dr. Phil segment is part of AARP’s Saving for Retirement Campaign, launched this year with the Ad Council. (The campaign’s website, AceYourRetirement.org, features an interactive coaching tool that provides easy-to-understand steps to jump-start a savings plan.)
Setzfand says the couple, married for 18 years and with just $300 in savings, shares a common financial theme. “They exemplify the story of a lot of people. They’re trying their very best. But they’re at a loss, feeling like they don’t know what to do,’’ Setzfand says.
A recent survey found that many households have virtually no retirement savings. About 2 in 5 households headed by people ages 55 to 64 — more than 9 million households — have no retirement savings.
Even saving a small amount helps, Setzfand says, because it’s a starting point. Setzfand urges consumers of every age to:
- Try to increase retirement savings every year, even if it’s just by 1 percent.
- Consider delaying retirement. Social Security payments increase each year you hold off collecting until age 70. That increases your annual benefit by 8 percent.
- Work after retirement. A part-time job or seasonal part-time work can add extra income.