The savings vehicle is geared towards people who have nothing saved for retirement and want to get started.
When I was at college, a friend of mine, who went to another small liberal arts school nearby, told me that it was an annual underclass(wo)men tradition to go Dumpster diving when the seniors left and reclaim everything from discarded furniture to functional televisions. Well, some enterprising, think-big type University of New Hampshire students have taken that idea and standardized / monetized it.
If you’re earning “enough” and you’ve got a little bit left over, and you’re only ever going to have a little bit left over, why not share some of what you’ve got? But now I’ve got more than a little bit left over, and I’m starting to think of my money as stackable units.
Bernstein’s manual is as readable as his facts are sobering. (None of us have pensions! We’re screwed!) The most important thing you can do is to save 15% of your income starting at age 25, he says. It will get you in the habit of saving, which is good because, get ready, there’s lots more saving to do.
At Motherlode, Ron Lieber wonders when the right time is for his kids to switch from saving money in a jar or piggy bank to a savings account at the bank. Lieber says there is value for kids to see their pile of money growing in a bank at home—money that they can actually hold in their hands if they wanted to. He points to David Owen’s book, The First National Bank of Dad which had a chapter on this argument