New data released by Bankrate shows that more Americans feel comfortable about how much they are saving, yet still aren’t doing a better job at it.
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According to the study, 21 percent of working Americans are not saving any of their income, and merely 25 percent are saving more than 10 percent of their income.
“If you don’t make saving a priority it’s not going to happen,” Bankrate Chief Financial Analyst Greg McBride said during an interview with FOX Business’ Liz Claman. “The beauty of a 401(k) is this money is payroll deducted. It comes out before you have a chance to even think about it.”
McBride said investing in a 401(k) plan provides the individual with an opportunity to grow their money on a tax advantage basis, especially if their employer matches a portion of your contribution.
“Saying no to free money is like saying no to ice cream. Who doesn’t like free money? You have to continue to at least enough to maximize that employer match,” he said.
The Bankrate chief financial analyst said if the employee’s workplace doesn’t offer a 401(k) plan, an alternative is to contribute into an IRA.
“You got a couple options there. You can save money and get the tax benefits now, or you can put in after-tax money now and be able to withdraw it tax-free in retirement,” McBride said.
According to McBride, the decision to save falls solely on the shoulders of the individual because of fewer pensions, the uncertainty of Social Security and the rising cost of healthcare.
“You have to take control of your own financial destiny by saving now, and the biggest financial regret that Americans have is that they didn’t start saving for retirement earlier, and we see that concern grow with age,” he said.