Most People Aren’t Saving Enough. Are You One of Them?

According to a recent Northwestern Mutual study, nearly 1 out of 3 Americans have less than $5,000 saved for retirement. The average retirement savings for all Americans is $84,821. That’s a far cry from enough. Experts typically recommend building at least $1 million in savings by retirement. So it doesn’t look good for the average American. And we aren’t doing much better up here. A CIBC poll shows that 32% of Canadians between 45 and 64 have nothing saved for retirement. 😮

The 3 pillars of retirement savings

I recently finished reading a book called The Subtle Art of Not Giving a F*ck by Mark Manson, which explains that we can’t possibly care about everything in our lives because that would be too exhausting. So we have to choose what’s actually worth giving a hoot about. For those who are having trouble saving for retirement the best way to get ahead is to focus on a few things that will make a substantial difference. 😀

Below are 3 important factors that are absolutely the mutt’s nuts to building up a retirement nest egg.


This is the number one tool to accumulating wealth. You can’t have savings if you never have income. Prioritize finding new ways to make additional income. This could be through a side job. Investment income is another method that requires patiences but ultimately has extremely lucrative results. For example this is what consistently investing in dividend growth stocks for 10 years can do in a bull market. 🙂

Another strategy that usually gives a lot of mileage is to constantly apply for new jobs. Every month make it a goal to send your resume to a few different companies, and follow up with any interviews or feedback you get. The worst case is you decline a job offer with a lower salary than what you’re currently earning. But if you are offered a better compensation package then you’ll receive an immediate raise in your career, either by joining the new company, or negotiating a higher salary with your current employer. 😉


The primary goal here is to minimize unnecessary expenses. I would start by looking through my bank and credit card statements. Be mindful of every single purchase, one at a time, and ask myself if I can live without it to determine which expenses are needs vs wants. If I’m not saving enough money, then I’d be inclined to stop buying most or even all of the “wants” in my life until I can either make more money or find other ways to increase my savings.

A useful experiment I practice to control impulsive shopping is to compare potential purchases with an equivalent amount of cash. For example, if I want a new cardigan I see in a store window I would imagine it in a cardboard box, and its purchase price amount in cash in a separate box beside it. I would then ask myself which box would I take? If my answer is to take the box with money, which is almost always the case, then I just walk away from the store because it means I value the money over the clothing and therefore shouldn’t buy it.



This one is a bit tricky. It is a huge topic by itself, but that’s why it is probably the most important aspect of building wealth (and keeping it) especially during the mid and end game parts of your life. In addition to making money and being more confident and secure about your money, there are a lot of intangible benefits to learning how to invest. For example, those who understand how investments work are less likely to fall prey for a wide range of get-rich-quick schemes because they know better. As a true beginner, index investing, and dividend growth investing are great topics to look into as starting points to build a lasting retirement portfolio. Remember to plan for the long run, so it’s probably not a good idea to put short term bonds in a retirement portfolio. And be aware of tax implications when it comes to different investment vehicles. 

If we choose only a few aspects of personal finance to give a hoot about it should be these 3 fundamental pillars.

  • Having a high income gives us that large margin of safety and peace of mind.
  • Having a high savings rate means there is less income to replace when we retire.
  • And having the right investment portfolio will insure our nest egg will outlast us.

We don’t have to get everything right when it comes to financial management. But our retirement portfolios will greatly benefit as long as we strive to earn more income, retain more savings, and become better investors. 🙂



Random Useless Fact:

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08/29/2018 7:58 am

Wonder if those GMO haters would rather eat the “natural” versions?

I always wondered if True Blue Canadian data would differ. Seems to me that our RRSP/TFSA products are more heavily marketed by the banks up here and that may skew the points in to the Canadian Dream realm more so than the USA. Just a thought on this subject. Other data such as health, spending and such is probably quite similar as we are so closely tied to the USA. Reading the BNN (CIBC) report seems to indicate that we Canadians are not such big savers after all.

As to myself, I will probably outlive my savings. But then, I am hoping to live to be 200!


08/29/2018 8:21 am
Reply to  RICARDO

Why did you say short term bonds shouldn’t be in a retirement portfolio? Short term bond funds do better than long in a rising interest rate environment and it’s good to not be 100 percent in equities.

09/11/2018 7:23 am

Not to mention that sweet compound interest…

08/29/2018 10:28 am

Most people are poor, that’s why they aren’t saving.
People make too little money and shit costs too much money.

Providing solutions such as “earn more money & save more money” is completely useless.

Then again, useless seems to be trend in blog article quality.

08/31/2018 5:52 am

Nah. Doesn’t matter, micro or macro, the huge majority of the global population is poor and unable to save very much, if anything. In hyper-capitalist societies like those found in North America, the poor don’t want to live like they are poor, so they spend instead of save. The societal and corporate pressures/conditioning to be a hyper-consumer are immense and pervasive. Societies operating on consumerism are built to make spending easy and saving hard.
(Amazon would be a zero if there were no spenders!)

You can say people can make the choice but most people most of the time are not in control of their own thoughts or actions. If you are poor — like most people are — the mental context to save is greatly inhibited.

People don’t save because:
1. They don’t make enough money
2. Goods & services are very expensive.
3. They are conditioned to spend.

09/04/2018 9:45 am
Reply to  Dude

Haha, I can’t tell if this is trolling or not. But you have elicited a response so that’s cool. Anyway, this sort of thought process tends to get you made fun of an FI type sites but I shall try to resist.

The opportunity to get ahead for most Canadians is huge. But most make large systemic mistakes such as too expensive of a house and big car loans that are hard to undo and set people back years. But for people like Liquid who avoid them from the start, it’s relatively easy to get ahead. Most can’t do it as fast as he has but it’s pretty easy over a 30 year window to get wealthy.

09/05/2018 6:02 am
Reply to  Steve

Then why aren’t most people wealthy? Esp those people who have zero barriers to entry to said wealth (e. g. white American males)?

08/29/2018 5:54 pm

The main problem I’ve found with others I’ve discussed this topic (both very rich and very poor) is the fact most cannot think and focus long term enough to see that investing truly is a path to wealth, well at least in the earlier stages of life when time is on ones side of the accumulation curve. Most are not willing to give up some of today for the prospect that tomorrow they might have more. The concept of doing without or delaying gratification is foreign to many, especially more so now in a world that bombards our fingertips to do the spending at every instant… Learn a skill, understand the power of patience, and do without that what you do not need, until such time as it is a reward and is affordable… Understand the difference between need and want. Basic math does not lie, but somehow we are made to believe it is better to have it all now than later. Stop listening and comparing to others. Formulate the plan, put the plan into action and adapt as necessary rewarding yourself appropriately along the way for attaining mini milestones. Your dream is achievable. I’ve been following this blog… Read more »

sherry @ save. spend. splurge.
sherry @ save. spend. splurge.
08/30/2018 7:03 am

Spending for me, is my weakness but my problem is I know I have my brain to fall back on for freelancing. Hence the safety net of crazy spending every month.

That said, I suspect if I save $200K a year, averaging $50,000 a year, I should be fine in retirement, give or take all my spending sprees and times off in between contracts. 🙂