Are you saving enough?

I recently (as in the past week) read an article about saving for retirement. The article gave some basic rules of thumb for people of various age groups. For example, it said that people in their 20's and 30's should be saving at least 10% of their income for retirement, and people in their 40's (my age group) and 50's should be saving at least 15% of their income. Most articles these days about investing point out what types of investments should be in one's portfolio. I even wrote a blog about this topic last month (What's your plan?). Last year's stock market disaster pointed out (to most people's chagrin) that even when you have a well diversified portfolio, you can lose money in your account. The basic plan for diversifying one's portfolio are to have a proper mix of stocks, bonds, and cash. In recent years, people have further diversified their accounts by also adding real estate and commodities to the mix. But last year, all of these investment asset classes lost money (except US Treasuries, if you were lucky enough to get in early). So what to do? Put all your money in cash? Bury it in a coffee can in your backyard? For starters, make sure you're saving enough. The real key to having money to spend in retirement is to save money for retirement. The average U.S. personal savings rate is less than 3%! At that rate, most people will not even keep up with inflation. So yes, it's important to periodically re-balance your portfolio, but it's critical that you save more than the average. Do what it takes to save that extra 7-12% needed to get back on track for your retirement. Unless, you see yourself wearing a spiffy blue vest and telling people, "Welcome to Walmart!"