Certified Financial Planner and IRS Enrolled Agent, Jim Blankenship, is the owner and author of FinancialDucksInARow.com, a blog that focuses on taxes, retirement planning, and Social Security.
He saw the savings rates as being too low to enable Americans to retire when they wanted to or that they didn’t have enough when they needed to. This caused him to reach out to his fellow bloggers to promote the idea of saving just 1% more in 2013 and to increase that amount by another 1% in subsequent years.
Q: What do you see as the biggest obstacle that keeps people from saving money in retirement accounts?
Jim: The biggest obstacle is inertia. We haven’t been saving so we want to continue doing what we have been doing which is spending all of our paycheck and not thinking about the future. Changing that habit and putting money aside is like the old fable about setting resources aside for the wintertime.
Q: Where can someone “find money” to save for retirement?
Jim: Some of the posts written for this initiative suggested
- Save money on groceries by using coupons
- “The Latte Factor” of cutting out expensive coffees
- Increasing car insurance deductibles
There are a lot of different ways to become a little more frugal in order to save just 1% more
Q: What can a Gen-Y’er do today to greatly increase their chances of retiring a millionaire?
Jim: The first thing is to not focus on a specific number. One million may not be enough by the time they retire. The point is to start with the small steps. The point is to start off with the small steps. Begin setting money aside now. It doesn’t have that much of an impact on your take-home pay and one of the greatest factors is starting early.
Jim: It’s very realistic. I put an example in my blogpost showing how someone earning $30,000 could set aside 1% with a 1-to-1 match. This resulted in the individual wound up with $600 set aside by the end of the year and it only cost them $5.00 a paycheck.
Read Jim’s post: Add your first 1% to your 401k
Jim Blankenship and I also discuss:
- Many companies automatically enroll new hires into their 401k plan, removing the first obstacle of getting started
- Beginning with a Target Date fund
- How often to revisit the investments
- How successful 401k savings has been for retirees
Your Action Step
Contact your HR Manager or visit your retirement plan’s website to increase your 401k participation by 1% next year. If you have a ROTH IRA or traditional retirement plan then make a conscious effort to send more every month. That is what I will be doing in 2013.
Other blogs promoting the initiative
A video tv segment from Laura Scharr: Preparing for Retirement
From Paula Hogan: 6 Ways to Add Another 1% of Income to Retirement Savings in 2013
From Kevin O’Reilly: From TwentySomething to Millionaire
From Tom Batterman: Take the 1% Challenge in 2013!!!
From Dana Anspach: Can You Spare A Penny?
From Steve Doster: The Easy Way to Become a Millionaire
From Nancy Anderson: Save 1% More for Retirement in 2013
From Kathy Stearns: Do the 1% in 2013!
From Ken Weingarten: The 1% Challenge (Should you dare to accept)
From Richard Feight: The 1% Challenge!
From John Hunter: Save What You Can, Increase Savings as You Can Do So
From Emily Guy Birken: Increase your savings rate by 1%
From Jonathan White: Ways to increase your retirement contributions 1% in 2013
From Alan Moore: Financial Challenge – Should You Choose To Accept It
From Ann Minnium: Gifts That Matter
From yours truly: Add Your First 1% to Your 401(k)
From Steve Stewart: Seriously. What’s 1 percent gonna do?
From Theresa Chen Wan: Saving for Retirement: The 1% Challenge for 2013
From Mike Piper: Investing Blog Roundup: Saving 1% More
From Robert Wasilewski: Increase Savings Rate By 1%
From Sterling Raskie: A Nifty Little Trick to Increase Savings
From Roger Wohlner: Need Post-Election Financial Advice? Try the 1% Solution
From Michele Clark: Employer Retirement Accounts: 2013 Contribution Limits