A recent analysis of the Federal Reserve’s 2013 Survey of Consumer Finances found that the average working-age American couple has only $5,000 saved for retirement. An overwhelming majority of couples—70 percent—have less than $50,000 saved.1
As you might imagine, that amount is probably far less than those couples need to fund their desired lifestyle in retirement. As a new graduate, you likely don’t want to end up in the same position.
Unfortunately, many young workers haven’t taken the steps needed to avoid a similarly underfunded fate. A study from the Federal Reserve found that 40 percent of those ages 18 to 29 have given no thought to retirement, and 50 percent have no retirement savings or pension.2
It’s the classic dilemma at the heart of every financial plan: Do you live for today or save for the future? The conservative and prudent advice is to live on a modest budget today so you have plenty of assets in reserve for future needs, especially after you retire. Commonly accepted wisdom seems to be that you should pinch pennies today in order to enjoy yourself down the road.
However, there’s also the very natural and understandable desire to live for today. There are likely things you want to do in life that would be best enjoyed while you’re young, not in retirement. Also, given the unpredictability of life, there’s no guarantee that you will be able to tick items off your bucket list when you’re older.