There is no doubt that retirement planning is important. With many Americans living into their 80s and 90s, it’s more important than ever to ensure that your finances are in order so you can enjoy your golden years.
Despite the wealth of saving and financial wellness options created by the retirement industry, there is still a major disconnect between the importance Americans say they put on retirement planning and their sense of actual preparation. Let’s take a look at why this gap exists and how we can bridge it.
Why Are So Many Baby Boomers Unprepared For Retirement?
One of the biggest causes of the disconnect between perceived preparedness and actual preparedness is a lack of information. Many people don’t understand what they need to do in order to actually prepare for retirement or what kind of savings vehicles are available to them. As a result, they overestimate their readiness because they don’t know enough about retirement planning to accurately assess their situation.
Another contributing factor is complacency — many people fall into a false sense of security when it comes to their financial future. They assume that because Social Security will provide some income during retirement, then they will be “good enough” when it comes time to retire.
Unfortunately, this isn’t always true — depending on factors like inflation, Social Security may not cover all your expenses during retirement. It’s important to remember that Social Security should be viewed as part of your overall financial plan for retirement rather than as an end-all-be-all solution for your post-retirement financial needs.
Finally, there are those who simply procrastinate when it comes to preparing for their golden years — after all, “retirement planning” isn’t exactly something that fires us up with excitement! This procrastination leads to a lack of action which can have devastating consequences down the road if not addressed soon enough.
Bridging The Gap
Fortunately, there are several steps we can take in order to bridge the gap between perception and reality when it comes to our retirement planning efforts:
1) Educate yourself on different types of savings vehicles available (e.g., 401k plans, IRAs). Know what each one offers and how each works in order to make an informed decision about which one(s) would work best for you;
2) Research different investment strategies (e.g., stocks vs bonds) including understanding risk tolerance levels;
3) Meet with a financial advisor who can help you create a customized plan based on your individual needs and goals;
4) Take advantage of employer-sponsored plans such as 401k plans;
5) Start saving early – even small contributions each month add up over time! 6) Open an IRA account if you don’t already have one;
7) Automate your savings – set up automatic transfers from your checking account into separate savings accounts (if possible);
8) Monitor your progress regularly – make sure you’re on track towards meeting your goals!
9) Revisit your plan every year or two – life changes quickly so make sure that any adjustments you need are made in a timely manner;
10) Always consult with professionals before making any big decisions regarding investments or other financial matters!
Retirement planning is essential if we want to ensure our financial futures remain secure during our senior years—but unfortunately, there is often a disconnect between perception versus reality when it comes to how prepared Americans feel they are for retirement versus how prepared they actually are.
Fortunately, by educating ourselves on different types of savings vehicles available, researching different investment strategies, consulting with professionals before making any big decisions regarding investments or other financial matters—and taking advantage of employer-sponsored plans such as 401k plans — we can bridge this gap between perception and reality so we can achieve our desired level of comfort come time for us all retire!