Saving for retirement: What you need to know

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Saving for retirement can seem like a daunting task.  So many questions. How much to save?  When to start? How do you know you’re investing in the right thing?

“I think part of what freaks us out about money is that many people feel uneducated and incompetent to manage it.  It makes them anxious,” says Anne Malec, a Chicago-based clinical psychologist with a background in finance.

Malec, the author of “Marriage in Modern Life: Why It Works, When It Works”  says evolution can be a driving factor of why so many people find themselves perplexed when it comes to saving for the future—especially when that future can be decades away.

Just 100 years ago, life expectancy was 50 years.  Today, it’s 30 years longer.  The wiring in our brains, Malec says, is what causes a disconnect when it comes to saving for retirement.

“When you’re 25 and you’re thinking ‘I can buy this TV, take this great vacation or buy these great shoes OR I could put this money aside and, in 40 years, I’ll be able to cover my medical costs, we know which way most people are going to lean,” explains Malec.  “Our brains throw us to that immediate gratification. Which goes back to our ancestors and not having to plan for the future.”

Because of that, saving for retirement is being made easier.  Automatic payroll withdraws into an account, matching dollar amounts—all of it is available to a vast majority of workers today.

“Number one: keep contributing to the plan no matter what’s going on in the market,” is the advice of personal finance expert Terry Savage.  She says even with market fluctuations, like the crash of 2008, retirement savings plans offer a great deal of financial security.

Savage suggests asking questions of any plan—even ones sponsored by your employers.

That includes:

What will your company match?  (Many offer a 50 percent match up to a certain amount.)

What are the management fees associated with the plan?  (Some plans can charge several percent a year, which could cost you thousands of dollars you could have for yourself.)

Savage says the best plans often are Index Funds, which offer fees under one-percent.

She says it pays to spend some time researching on websites like  A non-partial company that does the research for you and offers advice based on what they’ve found.

Other helpful resources:

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