It's Never Too Early to Plan for Your Retirement

Too often we see the evidence — higher levels of debt, less saving and too little retirement planning. In short, a lack of financial know-how is a major barrier to achieving financial security in retirement.

As a member of the President's Advisory Council on Financial Capability, I have come to realize that we cannot improve money management skills simply by directing financial education at the 50-plus population. To achieve financial security later in life, one must begin early in life. So, we must address the problem of financial capability with youth in our schools, with employees in the workplace and with families in our communities.

Unfortunately, most Americans think they know a lot more about personal finance than they actually do. Half of those working have no sense of how much savings they will need for retirement. According to the Center for Retirement Research at Boston College, almost 44 percent of working-age households ages 36 to 62 are "at risk" of having insufficient savings for their retirement years. This puts even greater pressure on national retirement systems that already face solvency challenges.

At AARP we are strong advocates for automatic enrollment in 401(k) plans. And where enrollment is not automatic, it is never too late to join or increase your contribution to these plans. In addition to adopting auto-features in plan designs, we believe employers have a unique opportunity to provide their employees with financial resources and tools to help them save and prepare financially. Americans should also learn, practice and share the core concepts of prudent financial management with their families and people in their communities. Research shows that parents are the single greatest influencers of positive financial attitudes and behaviors in their children.

At the same time, we understand the burden facing older Americans striving to recover from a brutal recession. We know that more than 20 million Americans age 50 and older are struggling to make ends meet. They face overwhelming stresses from mounting debt, poor credit, lack of health insurance and even loss of their family home. AARP Foundation and Charles Schwab Foundation have joined to launch a new Financial Capability Program for the 50-plus population. This financial education and mentoring pilot program is designed to help vulnerable older workers and job seekers set goals and take action to reduce debt, repair credit, build savings and regain control of their finances.

One of our goals at AARP is to find solutions that help people 50-plus and their families increase their long-term financial security. We fight to keep Social Security solvent and secure for the future; help individuals find ways to save, stretch their dollars and protect their assets; and work to ensure that people 50-plus can remain in the workforce for as long as they want or need to.  Financial capability is at the core of all of those efforts and is an essential part of constructing a solid foundation for individuals' financial security, as well as economic growth and prosperity for the nation.

You may also like: 10 steps to get ready for your retirement.