X = Poor House

MSNBC had an article today that said, in essence, that Generation X (those born from 1965 - 1980), are saving virtually nothing for retirement. Here's some excerpts:

Nearly half of the 5,000 Gen Xers surveyed by Charles Schwab this year said they are so saddled with debt or live on such tight budgets they can’t even think about saving.

Melanie Keller, 35, admits that fact. She worries about retirement because she only has $3,000 put away in a 401(k) plan and has no other investments. But instead of socking away money for retirement, the pharmaceutical saleswoman is trying to save $60,000 so she can buy a starter home where she lives in San Jose, Calif.

Once they have kids, they begin to worry about saving for their college educations, and retirement planning often drops in priority.

Credit card debt, too, remains another big roadblock to many people. As many as 40 percent of Gen X women and 58 percent of men said they carried a credit card balance of $5,000 or more, according to a 2006 survey of 300 people by OppenheimerFunds.

It seems that this "I'm going to save for a house or break myself financially while trying" is a common issue for my fellow Gen X'ers. Though some people may think putting off saving for buying a home is a good thing, it's a horrible mistake! You must realize that stocks, as an investment, absolutely destroy home's and other common forms of personal real estate. There is no 20 year period in existence where stocks aren't the best investment vehicle. Also, houses, on a national scale, have only outpaced inflation two times in recent history (post WWII, and the last seven years or so). As this article so eloquently put it, pay yourself before you pay others; in other words, put money into your retirements plans at all costs.

The woman saving for the house would be better off putting off the house for five years, and driving that money into retirement, since money put in today is what will heat your house when the old days come. She could even mostly stop saving for retirement when the house saving days came, because by then, compounding would be well on the way to make her some serious money.

Remember the golden retirement rule: save 15% of your salary for retirement, but if you can't do that, at least save enough to get any employer match.

As for running, I went for a jog around most of the Bayou (a little over 3 miles), and the foot felt as it has lately; angry, but accepting of the load. Not sure how Sunday will go, but it looks like I'm set to give it a try.