I saw an article on CNBC titled, “42% of Americans are at risk of retiring broke.” Then I dug deeper and found it was sourced from GOBankingRates. The below quote was taken from the article in GOBankingRates.

“The 2018 Retirement Savings survey found that 42 percent of Americans have less than $10,000 saved. If they don’t boost their savings, they’ll likely retire broke…”

America is in financial trouble and it’s showing with our baby boomer generation. Now, I did read that the survey only looked at “a specific age group — millennials, Generation X and baby boomers — and included about 1,000 respondents per group.” However, I wouldn’t doubt that 40-50% of Americans will actually retire broke, because I see it every day. I see it at my workplace, at my church, when I go to the store and have conversations with people about finances (yes, I’m not afraid to bring up the topic of money).

We have to address the big elephant in the room. The education on financial planning is not as good as it should be. It took me, an engineer to realize living with student loans for 8 years after graduating wasn’t a good plan. I could have paid off my $40,000 student loan debt in half that maybe even less, but I was ignorant. Of course I take full responsibility for my lack of knowledge with regards to personal finance. Could the schools, my community and my mentors done a little more? Sure, but if I was able to earn a Bachelor’s degree at one of the toughest engineering schools in the world there’s no reason why I couldn’t learn and understand the basics of personal finance.

Half of America is broke and can’t afford retirement.

So, where do we go from here? Community and education. Community is important. It’s where you can learn from others and ask question to problems you might be having. You won’t always get the answer you need, but at least you’ll be heard. If you need a community where you can grow and learn about personal finance then check out the Habesha Finance Facebook group.

Next is education. Basic principles like balancing a budget and investing in low cost assets are jut some of the information and skills you need to get financial control. I’m convinced if you get the right foundation then you can build your tower of wealth. This takes time, but in the long run this kind of education and planning is what is important.

So what can you do now to get started?

1. Stop spending money you don’t have. So many people like to buy gifts for the holidays. If you don’t have the money to buy gifts, then don’t. Not having presents isn’t the end of the world and when you have a goal of financial freedom to work towards. When you’re in control and on your way to your goals, then you will have holidays and birthdays where buying gifts isn’t an issue.
2. Find a way to increase your income. Aside from those with seriously, impossible to understand circumstances, I’m willing to go on a limb and say the majority of you reading can work an extra job to raise your income by 20-40% if you wanted. There is so much work available that increasing one’s income shouldn’t be that hard to figure out.
3. Attack your debt. Don’t get stuck paying the minimums. Try to pay 2-5x more than the minimum. Also, use the debt snowball method. This was my favorite method for getting me and my family out of debt.
4. Join the Habesha Finance Facebook group. This community is for you and you can ask questions, receive encouragement and learn what you want to learn about money.
5. Subscribe to the Habesha Finance newsletter and get a FREE financial checklist. This checklist was designed by me to be a foundation for you to gain financial control.
6. Speak to a fee-only financial professional. From all the research I’ve done and podcasts I’ve listened to, fee-only advisors are the way to go for anyone just starting the path of financial freedom. I can see a situation where the perspective and experience of a financial advisor is very helpful to those who are struggling with their debt and need help with retirement planning.

If you’re in a situation where you are getting close to retirement I would highly recommend you download the Habesha Finance financial checklist presented in #5 above. Then find a brokerage firm that can help with a retirement planning like Charles Schwab and spend a little time and money for their service. While some situations will be more dire than others, I do believe there is something you can always do to improve your future retirement.