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| | | | | | Why Credit Card Debt Can Derail Retirement Savings Advertisement
 Today's Smart Investor tip comes from Darla Mercado at financial publication InvestmentNews. While most workers consider saving for retirement a simple calculation of plan type, contribution rates, and investment allocation, Mercado says the impact of high consumer debt levels is often overlooked. "Credit card balances and mortgages take a significant bite out of workers' ability to save," she says. Putting aside 10% of your salary while racking up 12% in debt, for example, is a losing battle. From the article: "These days, the size of workers' debt is growing faster than their retirement savings. Active participants in defined-contribution plans in 2010 held about $9.2 trillion in those savings plans, according to an analysis by HelloWallet. They also owed about $4.2 trillion in debt. Further, from 2010 to 2011, 64% of participants in defined-contribution plans accumulated debt at a faster rate than they were accumulating retirement savings. That is up from 46% of retirement plan participants who lost ground between 2006 and 2007." What's more, debt management is typically left to workers to figure out on their own. Mercado says employers are resistant to helping employees rein in their debt for fear of being too paternalistic, despite that financial stress may have negative consequences on job performance. Click here to read the full article. SEE ALSO: Warren Buffett Warns Amateur Investors Against This Common Mistake | | | | | | | |
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