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How Would You Rate Your Retirement Planning Abilities?

Don't Fall Behind (as most Americans do) on Retirement Planning

 

As much as Americans focus on money, it’s disarming to know how few are focused on their financial future. The American College of Financial Services, in its survey of respondents who are in retirement or nearing it, found that close to 75 percent failed their quiz regarding retirement planning.

Americans are living longer, which means that if you stop working at age 65, you’re no longer planning for a ten-year period where you’re not earning an income – it’s likely much longer and you need to carefully plan for the decade-plus of no income other than what’s been put in retirement savings.

Only six in every 100 people were able to “ace” the quiz, implying that they are well-prepared for their retirement years. Almost 66 percent of the people quizzed reported that they had high levels of self-knowledge regarding retirement planning, which means that in actuality, they are unaware of their real financial situation as it relates to retiring comfortably.

As with any survey, differences in demographics were revealed in the retirement survey. For example, around 35 percent of males passed the quiz compared to 17 percent of females. This is particularly disturbing given the fact that women, on average, live longer than their male counterparts, which means their retirement planning acumen needs to be on point.

Another demographic difference showed that those with higher levels of education and wealth were more likely to be prepared for retirement. People with one million dollars or more in assets were 250 percent more likely to pass the test than those with less than one million. Furthermore, only nine percent of those without a college degree passed the quiz.

The caveat here is that people who can pass a financial literacy quiz are better planners and are better prepared to meet the challenges that can occur in retirement. And while it is evident that some demographics fair better than others, it doesn’t have to be a barrier to financial preparedness in retirement. All that is needed is a trusted advisor who can assist you in developing a sound retirement plan, and your ability to stick to that plan.

When you seek out an investment advisor, you should choose a trusted, experienced professional that can offer objective and non-conflicted advice. The best way to avoid conflict is to seek out a fiduciary, because a fiduciary must act in what they believe to be your best interests. Rather than work toward boosting their income by choosing products that give them a commission, many are fee-only advisors, which means they have no reason to offer something to you that doesn’t fit your goals.

At Family Investment Center, we have always operated as fiduciaries. Our goal is to get you to think about your goals for retirement and find ways to make sure you reach those goals. Contact us today and let’s start planning your own freedom tour.

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