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| The Basics | Why can't Americans save a dime?
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"People just do not have any idea what it takes to retire," Frank says.
One solution: mandatory 401(k)s
Most companies offering 401(k)s make participation voluntary. Some experts want enrollment to be automatic, although workers could refuse. Businesses using this format find that few people opt out.
"I don't think we have the political will to make it coercive, but switching 401(k) from opt-in to opt-out really takes care of a good deal of the problem," Mandell says. "People are very grateful. When you give them a structure, they're going to save."
Jeff Seely, CEO of ShareBuilder.com, an online brokerage firm, offers other ideas to promote savings: "Do not let people borrow against their 401(k). This is your retirement money. Don't touch it." Those who change jobs should roll over their 401(k) into an IRA or the new employer's plan. Fifteen percent of people who leave jobs cash in their 401(k) when they leave, Seely says.
Claire Celsi, a supervisor for an advertising firm in Des Moines, Iowa, also wants changes in banking practices. A single parent, she lives from paycheck to paycheck.
"The people who already have money are the only ones who get advantages -- free checking, better interest rates on credit cards," she says. "The fragile consumer, which I consider myself to be, gets kicked when they're down. Missing one payment can take your whole balance and charge you astronomical interest forever."
A late credit-card payment could raise the interest rate to above 30%, Bilker notes. Some late fees now cost $40.
Even lawmakers could help. "If the federal government continues to be in debt, to borrow to live today, why should the citizens not emulate the government?" Gupta asks. "They need to set the example by putting their fiscal house in order and encouraging citizens to do the same thing."
As in many areas of life, education is crucial and can begin at home. Greg Turner, a vice president of an audiovisual company in Denver, saves 4% of his salary, beyond his investments and retirement plans. "I inherited the attitude about saving from my parents," he says.
Although the negative savings rate is bad, Boss says, spending is healthy for the economy as a whole. "Nobody is trying to say we should hoard money or lock it up. You want money to circulate. You just don't want to spend more than you're making."
Bilker offers his philosophy: "Living modestly and being happy with what you have -- therein lies the success of saving."
For Davis, having a nest egg provides peace of mind. "Saving is one less thing I have to think about or worry about. Any money I spend is money that I can spend, and not money I should be putting away."
By Marilyn Gardner, staff writer of The Christian Science Monitor
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MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.
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