Yesterday’s story about retirement preparedness among black Americans lacking piqued my interest and made me search a little more today. I typed in “retirement planning 30s” into the search engine and found that poor retirement planning is not just an American phenomenon.

Asian Investor mentions talks about retirement preparedness…

The report shows that younger people in Hong Kong are more attuned with their retirement needs even if it’s still a long way away for them. Around 73% of the 25 to 29 year olds surveyed said they prefer to save for their future rather than spending now. A slightly lesser portion, or around 67% of those in their early 30s, said the same.

The report shows that the average age to start retirement planning is around 27 for Hong Kong males and around 27 for females. The report also showed that the consensus expected monthly expenses upon retirement was HK$20,000 ($2,600).

Those who are in their 30s are not as attuned to saving. The average age to start saving in Hong Kong is 27. I started before that. What is interesting is that younger people are more attuned to saving. That means that we, need to add a little more to our savings and let go of one or two things for a short time.

We are not attuned to saving because we want to buy, buy, buy and pay later. Buying is not a bad thing but if you are buying now to pay later for something you can’t really afford, then you shouldn’t do it. Buy, buy, buying helps dig a big coffin of debt. Saving or investing $25 today rather than spending that $25 could make the difference between future poverty and comfort.

There are differences in lifestyles choices for people who are investing. If you are frugal now, chances are you are going to be frugal later. That does’t mean that you have to forego a vacation or other diversions in life. If you are making $35K annually now, living comfortably and investing wisely what makes you think that you should be spending lifestyle of the rich and famous money as a retiree. Yes, most likely you will make more money as you move further in your career. That won’t make a whit of difference if you aren’t saving enough or underestimate your needs during retirement. There are people now who could not get by on $50,000 a year and others who would consider themselves wealthy if they earned that much annually. It is all about perception, and basic needs.

Hillary Clinton has a plan…

She said the savings rate today is lower than it was in 1929, more than 75 million workers do not have employer-sponsored pensions to save for retirement and many people who do have retirement plans are not saving enough.

Under her “American Retirement Accounts” plan, everyone would have access to a portable 401(k) and the government would offer matching tax cuts of up to $500 to $1,000 to help middle class and working families save. The campaign estimates it would cost $20 billion to $25 billion a year to provide the matching tax cuts and said she would pay for it by freezing the estate tax at 2009 levels.

“These accounts will take the best of the 401(k) plans and make them available to every working family,” Clinton told an audience of mostly elderly people gathered at a recreation center.

Some people say she is trying to buy votes. Maybe she just had the guts to try to get people to save money. I just want to know where does Social Security fit into this schema. There will still be people expecting to get a Social Security check or they have idea how to get $1000 or $500 to save. Then for a major life event people could take money out. I haven’t been sold on this plan. Theoretically, it sounds good, but then again… so did Social Security.

It all boils down to education. When people have a better fiscal education they have the opportunity to make better choices. Major life event? What if people decide that they can just use this 401k as a personal piggy bank instead of a long term investment? Just like home equity, a 401K should not be a line of credit that people can just use at will.

Just ask any “green” citizen and you know that person will not raid an investment account on a whim. You need to have some untouchable investment(s) to keep the money coming in.

I saw this article and (unfortunately) it reassured me that our country is moving closer to being a “green” society. Not green as in eco friendly but green as in money focused and creating a greater divide between the haves and have nots. The article goes on to say that only 25% of white Americans participate in company retirement plans. Basically, our nation needs to get on the stick when it comes to preparing for our financial futures.

NEW YORK (Oct. 11) – Employers have begun to discover troubling racial differences within their 401(k) retirement plans, a gap they say could leave today’s black workers far less financially prepared for retirement than whites. Investor surveys and research by two large employers strongly suggest that blacks participate in retirement plans at far lower rates and are much less likely than whites to invest in the stock market. An industrywide study of 401(k) plan activity by race has never been conducted.

No matter what you think about the Social Security program, there have been people who have relied on Social Security as their income in their golden years; irrespective of color. When you have people who are employed by a company that offers 401(k) plans and those explaining the plans have little or no experience doing so. I know people who cashed in their 401(k)s when they changed companies because they left the company. These were not black workers.

I also know that if you are not accustomed to saving money, as most Americans are these days, then any money taken out of your check that doesn’t have to be is not looked upon as a welcome deduction. Right now, I have a couple of younger friends and relatives who are not happy about having their check decreased for “retirement” that they will not see for at least another 30 years.

If you are making more, no matter what your ethnic background is, you would be more likely to participate in a retirement plan because you may have a lifestyle that you have become accustomed to and want to maintain it. Also, if you have some understanding about a retirement plan and the likelihood that you will not receive Social Security benefits you want to be able to do things like… eat, have a place to sleep and possibly get out and enjoy your retirement so you save something. There are companies that still offer pensions but not everyone is in that type of career.

Years ago, when a former employer offered a 3% matching program I jumped at it. I coaxed my friend and coworker to do it as well. I wasn’t getting paid a lot but I did figure out that if I contributed 7% and my boss was contributing 3% I was really gaining something. I had other goals in mind, so the seven percent was what I could afford. I was in my twenties but I already had another retirement account. I wasn’t looking at this as my only source of savings for my future.

Financial education begins at home. For the new “green” class, people received their financial education from somewhere – even if it was borne out of greed, talent or luck.

As a whole, Americans should be worrying about people who aren’t saving at all. It is easy to get trapped into the spend now and pay later mentality. How many really sexy, interesting ads do you see on television for retirement accounts are geared toward people who are more than 2 decades away from retirement? None that I have ever seen. All the ads are for people close to retirement age themselves wanting to leave work. I am a saver, but I got some of this education at home. I don’t completely deprive myself of everything but I don’t neglect my savings.

The last I checked 25% is not a majority. White, black or otherwise… we need to have people stand up for less consumerism and materialism and more for good stewardship and wise spending practices!