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You have a mortgage, a spouse, two kids and a cocker spaniel. What you don’t have yet is a clear path to retirement, an event that no longer seems quite light years away.  But as far as savings, well, other things have taken priority. And now, on top of that, the market looks shaky, or at least that’s what the morning news is reporting. You signed up for your plan at work, but at a rate where you are not even getting the full match. Or you stopped contributing when your first child was born, and haven’t gotten around to re-starting it like you had always planned.

According to the Employee Benefit Research Institute (EBRI), you are not alone. Although improving in recent years, non-participants and minimal participants still are extremely high for employees in their 30’s and 40’s. This is not a club you should want to be a member of, and you should be looking for ways to part with their company.

Sadly, there is no one who will scold you to get going, no one to nudge you back into the pool. It’s up to you, but you’re up to the task.  After all, you have that mortgage, a spouse, two kids and a cocker spaniel. There is absolutely no benefit to putting this off any longer. In fact, there still may be time to get back on course, or adjust your contributions to give yourself a chance at a comfortable retirement.

The first obstacle is yourself. Studies have shown that we have a high degree of status quo bias in financial matters.  Because investing does not provide guarantees, it is in its nature an unknown. When presented with the option of choosing between doing nothing (the status quo), and choosing an unknown (investing), many of us simply default to doing nothing, often without realizing we’re doing so. Status quo bias is not surprisingly related to procrastination, which continues to be cited by EBRI’s annual survey participants as the leading cause for non-participation (or minimal participation). Recognizing this bias can be a helpful step in overcoming it.

Dr. Richard Thaler of the University of Chicago, conducted a great deal of research on this topic while at Cornell University. He and his researchers developed a program called “Save More Tomorrow.” While the title sounds like a procrastinator’s dream, it was highly successful in raising participation rates, and increasing overall savings rates. And it was simple to do … simply apply some/most/all of annual wage increases to savings.

Their study found that not only was there improvement in savings rates and retirement outlooks, but also that the participant’s savings rates ended up higher than the base group, who had been saving adequately all along. Although some participants only needed temporary increases to their savings rates, most were so pleased with the resulting accumulation, they left the higher savings rate in place even after getting back on track.

Contributed by Michael Lares, CFP®. Mike joined Chemung Canal in 2004 as a Portfolio Manager and was promoted to Vice President in 2010. His work includes portfolio management, technical analysis, and extensive work with not-for-profits and retirement plans. He is a CFP® (Certified Financial Planner™) professional currently providing financial planning services to Wealth Management clients and institutions, utilizing his analytical skills and broad financial experience.

For additional guidance, please contact Marci Cartwright at 607-737-3754 or