Saving for Retirement

I was reading this cnnmoney article via yahoo finance about saving for retirement and was surprised and saddened by what I saw. The article didn't say, but since this is a retirement article I'm going to assume they mean saving in a 401k or IRA.

I wasn't so surprised to see that 43% have less than $10,000 saved for retirement, it seems like there are a lot of people that contribute only a little or maybe they contribute some and then take it out later. What really surprised me was that 27% had less than $1,000 saved. $1,000??? I save more than that every month! And it's not like I make more than $100k, I'm just good with my money - carefully spending and saving the rest. Actually I take the save first, then carefully spend then save again with whatever is left, which seems to work pretty well for me.

The article concludes by saying that people will have to work longer to make up for the shortfall in their savings. Which is fine by me. I have no problem with the choices that people make in how they spend their money so long as they don't expect me to help subsidize the difference between what they did save and what they should have saved by having to pay higher taxes.

Unfortunately this might be wishful thinking. Social Security, medicare and medicade all face huge funding issues and the only probable solution appears to be a combination of reduced benefits and higher taxes to bridge the gap. The net result is that the savers in the economy get punished. In the present the savers get punished through low interest rates and low rates of return on most investments and in the future the savers will get punished through higher taxes.

This is not good. It's actually very bad. Savings is one of the drivers of economic growth. Our government should be encouraging people to save, not be mindless consumers filling their over sized houses with ever more stuff. I only hope someone in Washington dusts off an econ book one of these years.