The pressure to save….or lack thereof

The pressure to save….or lack thereof

Once a week I attend a men’s group book club at our church. As one of the younger guys in the group, I really enjoy getting to surround myself with older men who have had the chance to make a few mistakes and also have plenty of success stories. It’s a great opportunity to be around some like-minded individuals who strive to become better fathers and men in general.

The book we are reading is called Play the Man by Mark Batterson. It’s a fantastic read and full of useful lessons. We’ve had some great discussions about fatherhood, work, religion and how we can all benefit from doing the things God lays out for us to do.

Last week our discussions lead us into an engaging conversation about saving for retirement. The leader of the group made a comment in regards to the tremendous amount of pressure that my generation has to save for retirement. He noted that when he was my age, he didn’t feel the pressure to save X amount of his salary for retirement.

I was speechless. I really had no idea how to respond.

WHAT?!?!

My first impulse was shock. What pressure? From where?

As part of this group we’ve never had in-depth discussions on this topic, but most of them know that my family is debt free and we began by following the principles taught by Dave Ramsey. So he had some idea about my philosophy on saving and investing.

I felt like I was being called out for being proactive.

Now, I know this guy had no ill intentions. And he was really trying to just prove a point that the pressure to save such a large percentage of your income is generated by society and not from the Bible. That it would be ok to back down from this pressure.

But I have to disagree. I think if anything, there is NOT enough emphasis put on saving for retirement.

Previous generations had pensions and social security so there really wasn’t a focus on saving for retirement. Now that pensions have given way to the 401k, us Gen Xers and Millenials really have no other option. And so yes, there is going to be some societal pressures to save for retirement. My generation has been told social security will not be around and it’s up to us to secure a comfortable financial future.

But still, as a society, is there enough emphasis being put on retirement saving?

I can remember graduating from pharmacy school and having a financial planner speak to us about saving. He used graphs and scenarios to show average current income and how much you’d have to save to be able to have that same income when you are 65. However, most of my graduating class already had visions of Cadillac Escalades, 5000 square foot homes and 20-30 years of student loan repayment. Priorities, right? If you’re going to tell a 20-something they need to set aside money for 40 years from now, how do you think they would prioritize that?

It Starts at Home

I don’t feel pressure from society to save. I just know the numbers. I was raised in a financially savvy home and my dad always included me when he and my mom made financial decisions as a form of teaching. Whether it was the monthly ritual of paying bills and car payments or showing me the amortization chart of their mortgage with an anticipated early pay off date, I was included.

Once I was in college and a little closer to starting a career I can remember discussing saving for retirement. That was also the time that my parents became even more focused on their financial future after retirement.

I was prepared to save before even entering the workforce. I had an idea of how much I should be saving and those lessons started from within the home, not from out in society.

So again I say, society is not putting enough “pressure” on it’s younger members to save. It’s ok to add some fuel to the fire.

It’s scary to think what my 401k would look like now if I hadn’t been

  1. Taught about compound interest and saving by my parents before starting a career and
  2. Held a personal interest in investing.

I’m sure I would have figured it out at some point. But would it have been soon enough and would I be saving at a rate high enough to obtain the goals I’ve set (FIRE by 50)? Just from looking at many of my peers and colleagues, I would have to say no.

This Vanguard report on 401k plans shows a median account balance of $24,700 for 2016. Only 18% of people were contributing at least 10%. And maxing out the full $18,000 for that year? Only 10% of participants. These numbers don’t jive with society is putting pressure or emphasis on saving.

Sure there is some awareness of the need to save and invest, but with such a distant timeline it can be hard for some people to see the benefit of saving for later, now. We owe it to our friends, our neighbors, our colleagues and our family to educate one another. It’s ok to put a little pressure on those around you. Encourage, but don’t lecture. It might just change their future.

 

 

 

 


2 thoughts on “The pressure to save….or lack thereof

  1. Bang on – there NEEDS to be more open and honest conversation about saving, investing, retirement. I’m not sure if societal pressure is the answer as most other type of such pressure and hand-me-down advice is not particularly the most effective – marry, buy the biggest house you can afford, work for 40 years etc.

    What I agonize over is how to broach supposedly sensitive topics about saving and investing with family and friends. I see my neighbors buying a brand new luxury vehicle and extol its superior handling capabilities but it’s not considered a civil subject to bring up available funds in their retirement account? Talk about remodeling their perfectly fine kitchen but not maximizing their retirement account?

    Someone should write a post on how to naturally bring up this topic while hanging out regular folks!

    1. I’ve noticed that to, especially in regards to paying off debt. People often default to a defeatist attitude and can think of reasons why it worked for you, but wouldn’t work for them.

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