Just like the government Americans need to save more and spend less. This is fiscal responsibility and each one of us is accountable.

Though the “auto” plan features of the Pension Protection Act of 2006 were a good start, we need to go further. Automatic enrollment is a great way to get more participants into their 401(k) plan, but deferring them at 3% into a one-size-fits-all target-date fundfilled with an overwhelming percentage of active equities is not the solution that will get participants to a successful retirement.With obvious exceptions, most should start at 10%, increasing with each raise. Some people cannot afford it, and some do not need it, but double-digit deferral applies to the other 90%. Worst case is that participants will be saving more money than they need.

Just as the U.S. government is being forced to make hard choices about the national budget after a decade of overspending, participants have to make tough decisions about where they live, what they drive and how much discretionary income they spend.

The formula to a successful retirement is simple save at least 10% of your earnings in a qualified plan, use a globally diversified portfolio and control your spending.

Please comment or call to discuss how your plan is doing.