False Confidence Driving Americans Down Dangerous Road to Retirement

False Confidence Driving Americans Down Dangerous Road to Retirement

A new survey reveals Americans are not planning for retirement, but believe they will be just fine.

The Employee Benefit Research Institute, a nonpartisan, nonprofit research group, recently released its annual "Retirement Confidence Survey." It found that we are not saving much money at all. The survey shows 54 percent of working age Americans reported having less than $25,000 put back, not counting pensions or home value. More than 1 of 4 have less than $1,000.

The same survey revealed that Americans know that they need to save. Nearly half of respondents have estimated how much monthly income they’ll need in retirement, and nearly a quarter of them believe they’ll need a $1 million or more to retire comfortably.

But there’s an enormous gap between what we believe we should do and what we are doing, and we are in denial. The survey reveals 63 percent of workers are “very confident” or “somewhat confident” that they will have enough money to live comfortably throughout retirement.

Too Busy or Too Late?

Chris Hogan, the author of a New York Times bestseller called "Retire Inspired," was recently a guest on the "Get Ready for the Future Show," a weekly personal finance radio program in Arkansas. He believes life is getting in the way of people planning for their future.

"If they’re young, they think they have a lot of time and it’s something that they’ll deal with later," Hogan said. "If they’re right in the middle of life happening, in their 30s or 40s, with smaller kids, marriage, and work, they feel like they’re too busy to have to deal with that. If they’re older, maybe in their 60s, late 50s, they may feel like it’s too late."

Hogan is a member of financial author and media personality Dave Ramsey’s organization and delivers retirement-focused talks around the country. His mission is to get people to take charge of their financial future. "You are the CEO of your retirement," Hogan writes in his book.

Chief Everything Officer

"When I say, CEO of your retirement, what I’m saying is the Chief Everything Officer," Hogan said. "You can’t hand off your dream. You can definitely go sit down and gather information, talk to wise people, and get good counsel, but ultimately what you have to do is be that champion. You’ve got to be the person that’s focused on reaching that goal."

Having a goal, or more specifically, having a retirement plan can make a huge difference. According to the "Retirement Confidence Survey," of workers who do not have a retirement plan, only 8 percent have $50,000 or more saved. Just 5 percent have $100,000 or more saved. Conversely, among workers who did have a plan, 48 percent have $50,000 or more saved, and 35 percent have $100,000 or more saved. The plan, in this survey, could be as simple as having a 401k. Hogan says that should just be the beginning.

"Too often times, people are putting their head in the sand," Hogan said. "They set their 401k up when they were in the their 30s, and they’re now in the mid-50s and they have never changed it. They’ve never made any tweaks. They never had anyone put their eyes on it and give them guidance. Those are missed opportunities."

Find a Guide

Hogan tells audiences, when it comes to retirement, not to go it alone.

"And I talk about it in the book," he said. "The importance of having that dream team, professionals that have the heart of a teacher, not of a sales person, and all I mean by that is they’re not trying to sell you stuff, they’re actually trying to help you get to your destination." 

The sub-title of Hogan's book is "It’s not an age, it’s a financial number." As a financial coach, Hogan has heard sad retirement stories, and inspiring retirement stories. The successful ones had something in common. "Retirement is not an old person thing. It’s a smart person thing," Hogan said.