SIKESTON -- When it comes to financially planning for the future, most young Americans prefer to live in the here and now, a survey says.
"In those early years, you think you've got forever," Donna Taylor, accredited financial counselor of Financial Fitness Service in Sikeston, said. "That's the good part of savings -- you do have lot of years, and it can make a difference."
Recently, Stowers Innovations Inc. conducted an Internet survey of people interested in learning more about financial matters. Less than 10 percent of the 18- to 34-year-olds surveyed have a specific plan for retirement at a specific age.
"The best time to start saving for retirement is yesterday, but the next best time is today," Taylor said.
The survey also found short-term savings are an issue, with 48 percent of young adults admitting they do not have an emergency fund to cover three-
months of living expenses should they face a financial crisis.
Taylor recommended taking advantage of an employer's retirement plan, such as 401(k), which is a retirement investment plan that allows an employee to put a percentage of earned wages into a tax-deferred investment account selected by the employer.
"If they have a 401(k) plan, the employer matches a percentage of your contribution-- so it's very important, and there are folks who don't take advantage of that," Taylor said.
Sometimes people don't take advantage of their employer's 401(k) because they don't know what it is or understand it, or they know it's a another deduction in their paycheck, Taylor said.
People should check the investments in their 401(k) and get a little bit of education and make sure they're invested in a way to the maximum, Taylor suggested.
"Young people can take some risks; they don't have to sit back and take a money market account, which normally pays very little," Taylor said.
Eric Wooden, financial adviser for Raymond James Financial on North Main Street in Sikeston, said young adults should also look at starting a Roth IRA (Individual Retirement Account).
"It can grow tax-free for them so when they're 63 or 65, they have a great retirement vehicle. Currently $4,000 is the maximum amount put into a Roth IRA," Wooden said.
When young clients come to see him, Wooden said he focuses on debt -- either them getting out of it or them not getting in it. And if they are in debt, for whatever reason, then they should identify where their money is being spent, he said.
"Too many times people don't really know where their money goes," Wooden said.
People should prioritize what they want to save for such as retirement, emergencies, a child's college savings, etc., Wooden said.
"Once you identify those, it's easier to save," Wooden said. "You can't start saving if you don't know where things stand."
Managing money is a discipline, Wooden said. And the younger a person is, the more time they have, he said.
"The magic in building wealth is time," Wooden said. "If a person has the time to ride through the ups and downs of market cycles, chances are they'll be pretty happy or impressed when get to the end goal.
Don't expect to depend solely on Social Security benefits after retirement, Taylor pointed out.
"The important thing is even though I believe Social Security will be here for us and those young people, it's never enough to live a comfortable lifestyle in retirement," Taylor said. "They need to be thinking about wanting more than Social Security retirement will give them."
The Internet is also a good tool to learn more, Taylor said, adding there are lots of retirement planning projections on Web sites.
Good news for Missouri's future adults is all public high school students will be required to take a personal financial course before graduating. The goal is to boost the financial savvy of future graduates beginning with the class of 2010.
According to the state Department of Elementary and Secondary Education, the course has been organized into four content areas: income and taxes, money management, spending and credit and saving and investing.
Wooden said when he talks to young people, he normally shares with them the 80-10-10 rule.
"For very dollar you earn, give 10 cents to the church of your choice, save 10 cents and live on the 80 cents," Wooden said. "And by the time you're 60, you'll have problems, but they will not be financial ones."