"Save your money for a rainy day" may be an old cliché. But in an era of declining retirement security, you ignore the old adage at your peril.
Unfortunately, most people find it difficult to save enough -- if anything at all -- and society is missing out on great opportunities to help them save more. This matters. Unless we change course, millions of families can say goodbye to dreams of a carefree retirement. Instead, old age will be a time of financial struggle and falling standards of living.
We know why retirement looks increasingly risky. About half of U.S. workers lack access to workplace plans that build up long-term savings. While other employees are able to sign up for 401(k) and similar plans, many do not. And 401(k)s have serious limitations. Beyond that, the economy remains weak, job growth is tepid, and average wages have been stuck in a ditch for years.
Remember when people talked about retirement as the "golden years?" Consider this scary statistic: In 2010, four out of 10 families headed by someone age 45 to 64 had nothing set aside for old age.
So our challenge is clear: We need to save a lot more, and we need to make saving much, much easier. It should be almost automatic. Of course, people should take responsibility for their future. More people need to recognize how their own efforts to build a nest egg will have a major impact on their lives.
But it is only common sense to put good decisions in easy reach. And we know a lot of ways to make it easier to save.
Automatically enrolling workers in savings plans, deducting savings right out of their paychecks, and gradually increasing the portion to be saved over time are proven and popular strategies.
They are simple measures that have a big impact. And they enjoy bipartisan support.
Employers should be strongly encouraged to offer retirement savings plans with these features, and individuals should take advantage of them if at all possible.
Elected officials on both sides of the aisle should work together to promote saving for people of all income levels, and to increase incentives to set money aside for the future.
Sooner or later, most of us will face that rainy day. As a society, we should be taking steps to plan for it - now.