America is greying before our eyes. Baby Boomers are retiring at the torrid pace of around 10,000 per day. Unfortunately, not all of them are prepared for retirement, either emotionally or financially. In all too many cases, the two are interrelated. Financial preparation can ease the emotional transition from earning and accumulation to relaxing and distribution.
Financial preparation requires years of planning, saving, investing, and protecting assets. On April 1, 2022 (we presume this was not an April Fools’ joke), the Insured Retirement Institute (IRI) released a survey, painting a dismal picture of Americans’ retirement landscape. Research was done in March of 2021, among Americans ages 40 to 73. Their results would be laughable, except that it is no laughing matter. Among respondents, the top 5 regrets include:
- They would like to have invested more aggressively
- They should have learned more about retirement products
- They wish they had saved more
- They wish they had started saving earlier
- They wish they had consulted a financial advisor
Given a Mulligan, what would most workers change if they could go back in time? As Eubie Blake remarked (upon turning 96), “If I’d known I would live this long, I would have taken better care of myself.” This is applicable to personal financial planning. If more people took early note of that last bulleted regret, the other 4 would likely be mitigated during the relationship.
What you can’t do is obvious--you can’t start sooner. Every day of procrastination requires saving more for the duration, and from the first dollar saved, investing more aggressively. What you can do, in keeping with your circumstances, includes starting today to put aside retirement funds. If you aren’t saving enough, start planning an increase in your saving rate immediately. Critical to most people is determining if you need help and then finding qualified advisors to interview.
Psychologists have for years studied the fears of Americans, and have concluded that there are two fears that, for many Americans, exceed the fear of death: public speaking, and running out of money. Most people can conquer their public speaking phobia with practice and coaching. Not so for running out of money, which requires more planning, and for a much longer time period.
Van Wie Financial is fee-only. For a reason.