Shopping vs. saving: Why aren't Americans planning for retirement?Blog added by Mike McGlothlin CFP®, CLU, ChFC, LUTCF on July 10, 2014
Mike McGlothlin

Mike McGlothlin CFP®, CLU, ChFC, LUTCF

Fort Wayne, IN

Joined: March 06, 2014

While reading some research data, I came across an amazing, nearly unbelievable, quote from a KRC Research project sponsored by TIAA-CREF. It read, "Americans prefer choosing a restaurant or buying a TV over IRA planning." What's more disturbing is that 55 percent of respondents spend less than an hour per year planning for retirement.

We have roughly 201,480 hours (or an average of 23 years) of retirement. So, with under an hour each year during our working years, we spend less than 44 hours planning for the next 201,480 hours of our lives. That 2/10,000ths of the time. Add health, inflation and taxes to the mix, and that time invested seems unreasonably short. How can we feel comfortable in our retirement years without the proper planning?

The trends grow worse. Only 17 percent of Americans are contributing to IRAs now, compared to 22 percent two years ago. Of the people not contributing to IRAs, only 47 percent of respondents would consider making contributions now.

See also: Americans may not be saving enough, but they want to be

As an industry, we can't blame our clients. We have a done a poor job of motivating people to save. We have become complacent with our assets under management and lost focus on our true responsibility — making sure our clients have confidence and can maintain a successful retirement. There are too many risks to be discussed: long-term care funding, longevity planning and inflation protection. These three topics require at least one to two hours of discussion.

It's time we refocus on the client, educating Americans on the risks in front of them, and providing solutions they may not be aware are available to them. Let's get back to the basics and talk about how our industry can eliminate risk to maximize our clients' chances for success.
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