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Marc Cuniberti: Like storing acorns for the winter

Much like a squirrel collects acorns for the winter, establishing good savings habits at a younger age can go a long way in easing concerns about how one will get by following retirement.
Photo by Caleb Martin/Unsplash

With so many Americans falling behind economically, the subject of saving for retirement may not only be a sore one, but a non-starter for many. With 21 percent of Americans having nothing saved (Northwestern Mutual 2018 Planning and Progress Study) and one-third of Americans having less than $5,000, one first might ask, what have people been doing?

Living hand to mouth might be part of the answer but likely some just haven’t bothered to save, for whatever the reason.

Some might mistakenly think Social Security will tide them through their golden years, if not in gold, at least enough green to enable them to survive. “Survive” being the key word here.



Estimates abound as to how much the Social Security system has and when it might run out. Fool.com pegs that number at 10 years, however this analyst is of the opinion when that happens – and if history is any indication – the government will just borrow or print up the money to make the checks good.

Those not making enough from Social Security will likely tap into other social safety nets such as subsidized health care, housing, food and the other necessities being offered through a variety of programs. But life in retirement definitely won’t be spent traveling the world for many.




The solution for those already middle aged might be elusive and difficult. But we have to start somewhere. For the younger generation establishing good savings habits now can go a long way in easing concerns about how one will make ends meet as they approach the rocking chair.

Saving money early can have surprisingly high payoffs given enough time and one only has to look at the math to hopefully manufacture some incentive to start squirreling away money.

The earlier one starts to save, the better. Take a 22-year-old who invests $6,000 every year — a daunting monetary task for someone that young, but if you manage it, by age 65, assuming a 9.8 percent annual return (historical return of the S&P 500 stock market over the last nine decades) they would amass about $2.8 million. Wait until age 31 to start saving and the results aren’t too shabby either. Your stock account still will sit at 1.7 million. Wait until age 40 and you’ll still have $690,000.

That’s a heck of a lot more than most people have today.

Realistically, however, few 22-year-olds can save six grand a year, but the point here is well illustrated. The more you save and the sooner you start doing it, the less you’ll have to depend on others to be able to rock your way into grey hood.

No matter where you are in the grand scale of the saving for retirement, putting away even a modest amount, when supplemented with a Social Security check, will make for a much easier path to your golden years. The pot you find at the end of the rainbow will likely be bigger than you think if you start saving now and keep at it.

The math and magic of a compounding balance over time can work wonders.

No matter what your age, try and establish some sort of investment plan right away. Start by making a savings plan then sticking to it. As to where to put it while you wait?

There are plenty of good books on investing that you can choose from, and many fine financial professionals who can help you on your way.

This article expresses the opinions of Marc Cuniberti and should not be construed or acted upon as individual investment advice. Mr. Cuniberti is an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Marc can be contacted at SMC Wealth Management, 164 Maple St #1, Auburn, CA 95603 (530) 559-1214. SMC and Cambridge are not affiliated. His website is http://www.moneymanagementradio.com. California Insurance License # OL34249. Indices mentioned may not be invested into directly.


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