The Employee Benefits Research Institute came out with its annual Retirement Confidence Survey a few months ago.
We at Miramontes Capital, who have grown accustomed to looking over the document each year, usually aren’t dramatically surprised by the findings of the report. While it is possible to see some trends over time, much of the results stay more or less the same — for instance, (only) 61% of workers this year are saving for retirement, and in 2001, the number was exactly the same: 61%.
The information does come in handy to prove a point, however. And today I wanted to talk about the importance of retirement planning. We all know it’s better to have a plan. But are you aware how much it could benefit you? The RCS does very well in showing the difference in retirement preparedness for those with and without a plan. According to their results, a solid 64% of those who lack a plan have less than $1,000 saved. Compare this to just 9% of those with a plan. Moving to the other end of the graph, those without a plan and who have $100,000 or more in savings total just 3%, whereas 35% of those with a plan belong to this category.
As you can see, there is a direct correlation between having a plan and saving successfully. And despite what you might think, the surprising difference in numbers here may not be due to those who “can’t plan” because of not enough money (although this is a factor). The survey found that 69% of respondents said that they could comfortably save $25 more per week than their current levels, if they wanted to.
So why don’t they?
The short answer has to be lack of planning. One more interesting statistic from the report is that fewer than half of workers (just 48%) have tried to calculate what they might need for a comfortable retirement. (I want to call attention to the word “tried,” as compared to the phrase “successfully and accurately determined”). Knowing what you need is the first, most basic step of the planning process, and fewer than half know it.
We all need help, especially in subjects that are foreign to us, as finance is for many. At Miramontes Capital, we strongly believe what the numbers from the RCS seem to suggest: that having a plan is going to greatly increase the likelihood that you’ll be able to lead your most meaningful life after work stops. But also, retirement planning starts with you, with your life. That’s why it’s crucial to find someone who can help you by first understanding your life, and working together with you to make that plan a reality. Contact us today If you’re ready to move your savings to the higher end of the graph.