The 2011 Retirement Confidence Survey seems to show what we've known in the profession for known for some time; while American's confidence in financial security continues to fall, the largely aren't doing anything to improve their chances. This proves again that the uncertainty and decision making leading into life's transitions, paralyzes people even in the fact of a problem that they likely understand very well on many levels.
The number of people saving actively toward a specific retirement goal has leveled off at about the same place as they were during the period from 2001 through 2008. The market decline in 2008-2009 bumped the savers up about 7% but that increase has gone away.
The report goes on to note the paucity of amounts actually saved, with most workers having less than $25,000. Perhaps more importantly, 30% of workers noted that they had to dip into retirement savings to simply pay for basic lifestyle expenses.
Consider this expert from a recent Financial Magazine blog post:
"Still, the vast majority of American employees are still under financial strain, even when the study looked at the least vulnerable demographic groups-men, those between 55 and 64, and workers who earned between $150,000 and $199,999 per year. According to the study, 83% of them reported having some financial stress; as well as 76% of those in the above age group; and 84% of those earning mid- to high six figure salaries." (Read the entire article here.)
Is Planning The Answer?
Planning is at the least a central part of the answer, if only because it frames the issues in a more understandable and less threatening way. Also, it takes what are largely the scary unknowns and converts them to known items, allowing for us to better understand the problem, it's implications as well as it's potential short and long term solutions.
Only 42% of workers have completed some form of "retirement needs calculation" according to the report. An an advisor I can assure you that most of those calculations are fraught with their own inadequacies, so while 42% may be the number taking that bold step, the percentage getting realistic advice as a result of it, is much, much less.
The difficulty here as we see it is that this becomes a problem easy to ignore, either because ignoring it allows you to live the illusion that if you can't see the problem it doesn't exist, or; because once you know the full scope of the problem, you're left with the fact that the problem's too far gone and you can't do anything to change it in any meaningful way.
And, this last fact is where we believe that there's a value in an adviosry relationship. The reality is that you can do something about it no matter how far along the problem is.
The input and persepctive of a professional can be an invaluable resource in working through the details of planning for any of life's transitions.
Anyone wishing to read the entire Retirement Confidence Survey can do at the EBRI website by selecting this link.
If you would like a complimentary reviwe of your own wealth management plan, connect with us and request a no cost, no obligation appointment for your review.