Your Money Minute with Dennis Staaland

Rebuilding your retirement account

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This week, let's talk about retirement accounts.  Investors in the U.S. Stock Market have lost more than $10.4 trillion since its peak in October 2007.  American workers lost an average of 27% in their retirement plans in 2008.  The average balance declined from $69,000 in 2007 to $50,000 in 2008.

Face it.  There are only 2 ways to pump up the balance in your retirement account: earn more on your investments or save more money.  And you can't count on supersized gains in stocks and real estate anymore. So, try to pump up your savings.  Investing just enough for the company match doesn't cut it. Push yourself as close to the limit as you can. The limit is $16,500 for a 401(k) and $5,000 for an IRA. Don't stop contributing!  The AARP reports that 20% of workers 45 and older have stopped putting money into their retirement accounts. I'm telling you right now, that is a huge mistake.

And for those of you trying to save for a child's college tuition, do not forgo saving for retirement to save for college. Retirement comes first. You can't take out a loan to retire.

Try to work longer.  The average age Americans retire is 60.  If you can work until 67, when anyone born in 1943 or later qualifies for full Social Security benefits, you'll gain time to save more and you'll cut down the number of years you'll be tapping your nest egg.