woman carrying a stack of bills, house and a car
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The average 401(k) balance has nearly doubled from its 2008 lows to $94,482 according to the Investment Company Institute. It seems like that would be music to everyone's ears. Yet a new study based on a survey of middle-class Americans from Wells Fargo (WFC) found that 48 percent of them are "not confident they will be able to save enough for a comfortable retirement."

Why the unease about the future? It's those mounting monthly bills.

We Owe, We Owe, It's Off to Work We Go

We're not talking about wanton spending here. We're talking about people paying their debts -- prioritizing their IOUs -- which leaves them little left over to set aside for retirement.

Nearly 60 percent of those surveyed said that their No. 1 daily financial concern is "paying the monthly bills," with saving for retirement coming in a distant second (13 percent said it was a priority). The ability to pay the bills and save for retirement is simply not possible, said 42 percent of the people Wells Fargo surveyed.

These folks are what financial firm HelloWallet calls "debt savers" -- people who take on debt and maintain it, but at the expense of other things.

While paying your bills on time is obviously a good practice, it also happens to be a great excuse to put off saving for retirement.

A recent Hello Wallet report found that 60 percent of households accumulate debt -- including credit card debt, auto loans, and mortgages -- faster than retirement savings. That puts a damper on people's ability to spend in the short term, and of course makes it difficult to throw extra cash into a retirement savings account for the long term.

Saving Is Harder Than Paying Off

There's never an easy time to start saving. Psychologically, it's painful. It forces you to delay making purchases of what you'd like to have now -- often for years. The gratification is frustratingly postponed, which is why so many Americans fail to develop a retirement plan altogether.
And as the Wells Fargo study makes clear, the ones who don't have a plan are the ones who really aren't sure they'll be able to retire anyway.

For some people, it really would make more sense to take a break from saving for retirement to eliminate their debt. After all, if you have credit cards charging 20 percent-plus interest rates, the return on investment for paying them off far exceeds what you could realistically expect from an S&P 500 index fund.

An alternative would be to boost retirement contributions so that the pace of saving for retirement exceeds that of paying off debt.

But there is another way, and that is to rethink the role of debt -- even so-called "good debt."

A New Framework for Debt

The ideas of "good debt" (think student loans and mortgages) and "bad debt" (such as credit card debt and car loans) have long been part of the accepted canon of financial wisdom. But the delineation is no longer serving people well. We've got to free our minds of the notion that there's "good debt" and "bad debt."

Buying a home might seem like the right thing today -- but don't expect your home to provide for you in your golden years. Historically, home prices have a horrible track record.

According to Nobel Prize-winning economist Robert Shiller, a $100,000 home is historically worth only $112,723 after a 30-year mortgage is paid off. But the same amount invested in large-cap stocks would be worth $719,677 -- even after adjusting for inflation.

Granted, that's not entirely a fair comparison. You do have to live someplace. And, yes, you can sell your home to get cash in retirement. But as the example above shows, you're not going to profit much.

Buying a home is not the same as saving for the future. And stretching your paycheck to buy a home that leaves you with little left over each month to invest elsewhere is not a sound financial move.

The lesson here is clear: Figuring out a rough estimate of how much you'll need to retire -- and developing a plan to gradually get there -- is the first step to a comfortable retirement. The critical next step is to rethink how you want to direct your dollars -- and whether taking on debt -- even "good" debt -- is going to serve you well in the long-term.

Adam Wiederman has no position in any stocks mentioned. Click here to read Adam's free report on how to ensure a wealthy retirement. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Wells Fargo.

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Thomas B. Grady

My plan takes away the worry associated with this. I\'m just going to work until I\'m either 80 or dead, whichever comes first.

December 17 2013 at 2:22 PM Report abuse +1 rate up rate down Reply
1 reply to Thomas B. Grady's comment

What happens if you live to be Oh say 98? Now you have no Job and your not DEAD

December 18 2013 at 11:53 AM Report abuse rate up rate down Reply

If you do not have a pension and do not own land or a business you can sell for a couple of million, you are screwed. Regular office workers do not make enough to save, especially when essentials are 4-10 times more expensive than they were when my parents were my age. From a NYC perspective, rent + bills leave you with a fraction of your paycheck, just barely enough to last until your next paycheck; we are not saving a dime because there is no dime to save.

December 17 2013 at 8:26 AM Report abuse rate up rate down Reply

There's no such thing as good debt.

December 09 2013 at 6:20 PM Report abuse +1 rate up rate down Reply
1 reply to ccdae5's comment

I agree... NOW student loan debt does not equal a guarentee of a higher income to justify the cost is at least some cases. Buying a house bigger than you really NEED is a waste. You can only be in one room at a time. The taxes and utilitys are more in a bigger house.

December 17 2013 at 5:51 PM Report abuse rate up rate down Reply

At retirement, first of all after working 50 years, it is an adjustment. But here is my offerings. Take your gross income and add 30 percent. If you work for a company or State that offers retirements, then with Social Security and your side investments, your life will not change. If you have a million dollars sitting in the bank, not earning any money and no guaranteed retirement package, then divide that million into your gross now, and see how long that lasts you! Those of us who are old and comfortable, all worked where benefits were included and retirements for life. After all the kids and college is over, then major amounts can be saved to make up any differences or unexpectations you may have. One thing I see comments on is owning vs. renting. We have always owned, but with taxes, insurance, upkeep, all kinds of help needed as you age, sometimes I believe it would be cheaper and less worry to rent. But all these big homes are "home", debt free, kids come and go, quiet, peaceful, so I guess it really is an individual choice. Gated communities, no one shooting at you, like your neighbors, then you have your answer. Retirement takes planning, you can't live a decent life on Social Security and in the future it may not be there anyway. Many young people say how can they save when they are barely existing, you are young, saving big money came later for us and we have a nice life now, but you have to be serious, plan and decide what and where you want to retire.

December 09 2013 at 4:31 PM Report abuse rate up rate down Reply

Some comments here are really sad but oh so true. I wonder how many people will work all their life to get everything paid off by retirement only to lose it to the blood ******* leaches of government taxing their homes (real estate taxes) to the point they can't afford the house. Or worse yet they continue to work to keep their home to pay those afore mentioned leeches to only die at the job working to pay the taxes......Pure BS!!!!

December 09 2013 at 3:17 PM Report abuse +1 rate up rate down Reply

No debt is a good debt. When you retire have your home,cars,boats ect. paid for. Being debt free is the only way to go. Insurances and taxes and food is the only expense. You will never have enough money to live the life you want. The stock market is no different than a crap game.

December 09 2013 at 3:08 PM Report abuse +3 rate up rate down Reply

Thank goodness I retired with a great union pension and Soc.Sec. Combined my monthy income is over $5,500 after taxes.. My savings I use for travel, hobbies,sports, etc. Suckers fell for that 401k garbage in lieu of pensions years ago. I had an IRA, lost over $50 grand in Nov. 2008. I pulled the rest out and bought some undeveloped land. Luckily I sold it all off and made all my money back and posted a small profit.

December 09 2013 at 3:04 PM Report abuse +2 rate up rate down Reply
3 replies to rschli7137's comment

Thanks to globalization and its relentless race to the bottom more people are on a fast-track to eating out of garbage bins than they are pumping up their 401K futures. On capitalism's Titanic, the lifeboats *will* be seated according to class . . .

December 09 2013 at 2:48 PM Report abuse +1 rate up rate down Reply

As I read these comments, I remember an old co-worker of mine. He was such a nice man. He was good at his job but, was so physically ailing that he should've been able to retire. He would laugh and tell us all the stuff he couldn't wait to do when he could retire. He literally died on the job. Dropped dead from the hard work. Unfortunately, this will become the story for many us simply because most of us won't be able to retire. We may be forced out or bought out but, that won't equate to a safe or livable retirement. What meager funds we have left, will be sucked away by medical bills and nursing home care. The grim truth is we're just treading water until the first financial catastrophe hits. In the end, we'll exit like we came in. With Zilch.

December 09 2013 at 1:39 PM Report abuse +3 rate up rate down Reply
1 reply to sqmomsusan's comment

This is how it used to be in America before WWII. We got spoiled living in a bubble created by WWII that has been winding down ever since the early 70's. Unfortunately, what you described is probably closer to normal. Good luck.

December 09 2013 at 6:24 PM Report abuse +2 rate up rate down Reply

Retirement is for most Americans a pipe dream. With the broken promises of pensions and 401ks we're all gonna have to continue to work and produce at some form of gainful employment into our seventies. I know for me the level of happiness in my life is directly related to the satisfaction I get from working. Unless your phyaically unable keep your job and stay vital to the day you pass on to that great unemployment line in the sky. You and your families will be better for it.

December 09 2013 at 1:36 PM Report abuse +1 rate up rate down Reply
1 reply to asronce's comment

Maybe you, but from the day I carried my first golf bag at age 12, I realized work is a 4 letter word. From that day I invested in dividend stocks, until we retired at 43 years of age, with a 7 digit retirement account, two pensions, and two Social Security incomes. And no, we were not Public employees, both private sector, beginnin in Silicon Valley in 1977, after six years in the military.

December 17 2013 at 9:08 AM Report abuse rate up rate down Reply