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I Am Outraged!

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I just learned that Congress has declared this week National Save for Retirement Week. I can't quibble with their motivation, but I'm outraged all the same:

  • Almost half of all workers say that they've saved and invested less than $25,000 for their retirement.
  • One in five retirees claim to have no savings at all. (Yikes!)
  • Most of us can expect to need between 75% and 85% of our current income to live on in retirement.

Assume that you're about to retire with a nest egg of, say, $50,000. According to the statistics, you're ahead of the game. Our Rule Your Retirement newsletter service has recommended that to make your nest egg last, you should plan conservatively and withdraw about 4% of it per year in retirement. So 4% of $50,000 is ... $2,000. Per year. That comes to $167 a month. Can you live off that? Is that anywhere near 75% to 85% of your current income? I didn't think so.

The outrage
I'm irate because Congress is suggesting that we can address our retirement needs by saving money for just one week. Many of us should be aiming to sock away 15% or more of our annual income. For those earning $60,000 per year, that's $9,000. Can you put aside $9,000 in one week? Me neither.

Oh, wait a second -- my editor is tapping me on the shoulder...

OK. Seems I was wrong. The week is for increasing awareness of the need to save, not for actually doing all your saving. Fair enough. So let me urge you to take advantage of this reminder and focus on your retirement plans.

Do you need to contribute to your IRA this year? Do it. Are you looking for some dividend-paying stocks for your portfolio, to provide income in retirement? Use our CAPS screener to find highly rated dividend payers such as these:

Stock

Dividend Yield

3M (NYSE: MMM  )

3.5%

Analog Devices (NYSE: ADI  )

3.9%

ConocoPhillips (NYSE: COP  )

3.3%

Diageo (NYSE: DEO  )

4.9%

Stanley Works (NYSE: SWK  )

3.6%

Maxim Integrated Products (Nasdaq: MXIM  )

5.0%

Northrop Grumman (NYSE: NOC  )

3.4%

Source: Yahoo! Finance.

And if $167 a month won't cut it for your retirement, learn to plan for a cushier one. Our Rule Your Retirement service can give you all the tools you'll need to retire happy. A free trial will give you full access to all past issues, plus recommendations of promising stocks and mutual funds, too.

Longtime Fool contributor Selena Maranjian owns shares of 3M and Maxim Integrated Products. Diageo is a Motley Fool Income Investor pick. 3M is a Motley Fool Inside Value recommendation. Try our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.


Read/Post Comments (2) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 21, 2008, at 1:09 PM, junkanoogeo wrote:

    When will congress do something smart for a change? Like offering incentives to save (as opposed to incentives to for investing). Savings still ultimately get loaned out to businesses that invest, but savers get a more stable (dull?) ride into retirement. It seems to me that the longer they put off incenting savings, the bigger hole they (and us) will be digging as a nation in the future.

    Another big help - reintroduce usury laws into the consumer credit industry. The banks have not only screwed themselves, they have congressional air cover to screw consumers, too.

  • Report this Comment On October 21, 2008, at 1:33 PM, tjval wrote:

    I'm outraged less by this than by having to work for 113 days this year to pay taxes, as per http://www.taxfoundation.org/taxfreedomday/. Perhaps if that number was reduced, people would have more money to save....?

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Selena Maranjian
TMFSelena

Selena Maranjian has been writing for the Fool since 1996 and covers basic investing and personal finance topics. She also prepares the Fool's syndicated newspaper column and has written or co-written a number of Fool books. For more financial and non-financial fare (as well as silly things), follow her on Twitter...

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