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Saving for retirement? Better get a move on

Reduced workplace pensions put pressure on workers to find other ways to save


AARP has always promoted financial security for seniors. But a recent AARP-sponsored workshop hammered in the message that Oregonians who don’t save for retirement may be forced to work when they’re elderly.

Currently, 10 percent of Americans age 75 and older still work, and most of them work to make ends meet, said Matt Swanson, political organizer and member of Service Employees International Union Oregon State Council.

At the well-attended event in Southeast Portland at SEIU headquarters, Swanson directed many of his comments to those younger members of the audience, warning them that if they didn’t start planning for retirement, they likely will be unable to pay their monthly expenses when they reach their senior years.

But considering the demise of pensions and living-wage jobs and the problem of student debt, younger workers are facing difficult choices.

by: FILE PHOTO - Margaret Doherty, workshop speaker.

“The people who are not saving right now are part-time and low-income workers and young people,” Swanson said.

It’s hard to save when someone is employed in a low-wage job, as Swanson demonstrated by an exercise in make-believe with audience volunteers, each of whom was given employment, such as a nurse or a housekeeper, and a set amount of play money to cover monthly housing, food, transportation and other necessities. At the end of the exercise, the ones representing workers making $50,000 or less ended up with little or no extra money for saving.

“One of the top five issues facing Oregonians is saving for retirement,” said State Rep. Margaret Doherty (D-Tigard), who participated in the event’s panel discussion.

A former school teacher, Doherty said personal finance used to be taught in the public schools, a class that she recommended be revived.

Doherty supported legislation creating a task force to look into a state-administered retirement savings plan, similar to Oregon’s existing college savings plan. “With this legislation, financial institutions were not real happy with us because they thought we were taking money away from them,” Doherty recalled. “But I said to them, ‘Are you going to help people save $30 a month?’”

Of course, Social Security benefits alleviate much of retirees’ financial stress — but not all. And, for 25 percent of the nation’s seniors, Social Security currently represents 90 percent or more of their income, according to panel member Bonnie Yates, a licensed CPA and AARP Oregon volunteer.

While a show of hands in the audience to Yates’ question “How many believe that Social Security will be there for you when you retire?” showed several doubters, Yates assured them that Social Security likely will survive, though it might change somewhat.

“Social Security is not in such horrible shape that it’s going bankrupt tomorrow,” Yates said.

But by the time younger workers retire, their official retirement age to receive full Social Security benefits might be nudged up to 68, or even to age 70, Yates said.

So, relying exclusively on Social Security for retirement income is not a viable option, said panel member John Alexander, a financial adviser with MEMBERS Financial Services.

“You can not live just on Social Security anymore,” Alexander said. “I have a number of clients who tried it.”

So what’s the savings solution for younger workers? If your employer offers a 401(k), put in at least what your company will match. Track expenses and budget. And whenever possible, put the brakes on spending, pinch those pennies and sock that money away, the panel members advised.