Too Few Youngsters Saving Now

USA Today has an article on how my generation is not saving enough for retirement. While you could truthfully strike "my generation" from the above sentence, it's particularly an issue because we have time to know and shouldn't be having this problem.

Nearly 80% cite daily living expenses as a barrier to saving. While I know this can be a legitimate issue, there are ways to cut living expenses to the point where you can save. I, personally, just began putting money into my 401(k) again after buying a house and the birth of my daughter put a crimp in our budget (my wife is a teacher with a pension, so she was automatically saving). But we made every attempt to get back to putting into my 401(k) as fast as possible once my employer began offering a match.

61% cite "lifestyle purchases" as reasons not to save. This would be buying a nicer car, a big freaking tv, the latest iPod, etc... Why is this important? Compounding!

Here's an example from Choose to Save, a public education program. Suppose you want to save $100,000. If you have 20 years, you can reach your goal by saving $3,272 a year and earning a 4% annual return. Shorten your time frame to 10 years, and you'll have to save $6,559 a year and earn 8% annually to achieve the same goal.

It gets worse when you have 40 years to save before retirement but put it off until they are 50 and are unable to match the amount they would have earned. About.com has another example of this power.

So, Gen Yers. Save now. The more you save now the earlier you can stop working. There, that should be enough incentive.