Why You Can't Afford to NOT Save

Most articles that try to encourage saving for your future start to become blah, blah, blah. So after a while we're just not listening anymore. Calculators can give you startling estimates about how much money you'll need for retirement. While other calculators might amaze you with how much you'll have if you start socking away 10% of your salary to a 401(k) while in your 20s.

But consider this...

• Calculators can't predict the future. Anything can happen in the next 30-40 years. The market might go bullish. Maybe you'll stumble upon a fantastic investment. Or things could take a turn for the worse and you lose money. Thirty years is a long time and the market will fluctuate. Calculators are designed to show an average and are not a guarantee.
• Social Security is unpredictable. This is straight from the Social Security website: Social Security's financing problems are long term and will not affect today's retirees and near-retirees for many years, but they are very large and serious. People are living longer, the first baby boomers are nearing retirement, and the birth rate is lower than in the past. The result is that the worker-to-beneficiary ratio has fallen from 16.5-to-1 in 1950 to 3.3-to-1 today. Within 40 years it will be 2-to-1. At this ratio there will not be enough workers to pay scheduled benefits at current tax rates.
• You never know what can happen. Life is unpredictable. You can hope or even pray for the best, but you never know what might happen or how it might affect your finances.

So to be prepared let some of the blah, blah, blah filter into action. The biggest problem isn't knowing how to save, it's actually doing it. It's easy to convince yourself that your budget is too tight to fit in savings. Or you might even rationalize that in this present moment the most important thing is to enjoy life. Well, you can always find some way to squeeze in savings (a 401(k) is painless). And you'll enjoy life just as well knowing that your future is a bit more secure.