How to Increase Retirement Savings

It's the end of the annual America Saves Week, a national movement sponsored by hundreds of organizations and financial institutions that reminds consumers that, “Hey, you need to save more!” The key reason, of course, is that many Americans don't save enough for rainy days, or for their eventual retirement.

Or, as the group states: “Established in 2007, America Saves Week is an annual week-long event coordinated by the America Savings Education Council and the Consumer Federation of America during which more than 2,000 organizations across the U.S. work together to promote good savings behavior.”

Some Sage Savings Advice
“It’s never too late to begin. The sooner you start contributing to your employer-sponsored retirement plan or IRA, the better your chances for building a significant savings cushion,” says Christine Marcks, president of Prudential Retirement. “Once you start saving, it becomes even easier to make small increases with your savings allocation. The impact is often barely noticeable in your paycheck, but could really make a big impact on your retirement savings over time.”

For Americans who have not started saving, Marcks suggests a few tips. Consider enrolling in your company’s retirement plan right away or open an IRA. Once enrolled, Marcks encourages people to manage risk by diversifying their savings over a well-chosen mix of investments. Americans should also check with their employer to see if there is an option in the plan that provides guaranteed income for life during retirement—essentially transforming your savings into a retirement income stream .

According to the Center for Retirement Research at Boston College’s 2012 National Retirement Risk Index, the number of workers at risk of being unable to maintain their pre-retirement standard of living once they retire has risen over 20 percent from 44 percent in 2007 to 53 percent in 2010.

There are several vehicles that Americans can use to save for retirement, including workplace retirement plans and personal investment and savings accounts. However in recent years, increasing longevity, market uncertainty and low interest rates have placed many Americans at risk of outliving their retirement income.

“Helping Americans achieve financial security in retirement is one of the most pressing issues facing our country today,” says Bob O’Donnell, president of Prudential Annuities. “Guaranteed lifetime income products can provide income certainty in retirement — supplementing Social Security and providing protection from market volatility, interest rate fluctuations and the financial risks posed by living longer.”

While there are several strategies available to help build and increase retirement saving, many Americans are overwhelmed by the number of options available and may not fully understand how they work.

“This is where a financial professional can become a valuable resource for some people,” says Caroline Feeney, president of Agency Distribution, Prudential’s national sales organization. “They can provide information and guidance on how to best manage retirement savings and investments to help clients better plan for their future.”

To help Americans build savings and improve their individual retirement security prospects, Prudential Retirement is working with plan sponsors and advisors to provide relevant interactive educational tools to help Americans increase and better manage savings, reduce debt and make retirement planning a priority.