Many Boomers Defer Saving

Has your countdown to retirement begun?

The reality is that retirement isn't that far away for the leading edge of the baby boom generation, yet many haven't even started saving for that part of their lives. The American Savings Education Council says that fully 20 percent of workers in their 40s have not yet begun to save for retirement.

The 1999 Retirement Confidence Survey found that the median amount already put away by 40-something households is less than $50,000. Experts say you'll need between 70 and 80 percent of pre-retirement income to maintain your current standard of living when you stop working. The ASEC figures that a 45-year-old who earns $50,000 a year and plans to retire by age 65 needs to sock away $336,000 by the time they collect their gold watch.

Chances are, you're nowhere close to that figure. Would investing in stocks be a wise choice, given recent trends?

You don't have to be a financial wizard to know that the stock market has been volatile lately. The Dow Jones Average has also shown below-average performance as of late. That makes some folks shy of trusting their retirement savings to stocks.

Ric Edelman, president of Edelman Financial Services, Inc., says, "The current volatility of the stock market is irrelevant to someone engaged in retirement planning." Edelman told ThirdAge, "Ask yourself if you expect the stock market to be higher in 10 years. Of course it will be, so you shouldn't hesitate to invest. Daily volatility is a wave in the ocean. You need to be concerned with the overall tide."

So how can late-blooming boomer savers jump-start their retirement funds?

"Save," Edelman says. "First, get into your company's retirement plan and save the maximum permitted. Secondly, save on your own, with mutual funds. Only put money in these funds that you're prepared to leave alone for 10 to 20 years. That avoids concerns over these daily volatility issues."

Ignoring the inevitable isn't going to help. Chairman Dallas L. Salisbury of the ASEC says boomers "can either take charge of their finances today, or pay the high price of not having prepared properly tomorrow."

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Consult A Late-Starter's Guide to Saving for Retirement