As study after study is released showing that American workers are ill-prepared to support themselves in retirement, a new study is offering a glimpse into what 18% of Americans who feel “very confident” about retirement have that the rest of Americans don’t.
First and foremost, these “very confident” Americans know their number. The fact is, in order to know how much you need to save, you need to know how much money you will actually need during retirement. It’s not simply saving money but taking the time to calculate what your retirement needs will be ahead of time so that, while you’re planning for the future, you know how to stay on track.
Indeed, when workers in the new study checked that they had ‘run the numbers’ through a retirement calculator, most had a 40% bigger retirement “nest egg” than the rest. The fact is, using a savings calculators is a really important trigger for improving actions and savings rates. You don’t need to hire a pricey financial planner to get your number either. There are free tools offered by EBRI, Bankrate, the AARP, and Kiplinger.
This 18% also have money and know how to use it. It’s obviously easier to save for the future when you have more money to start with, and workers who earn over $75,000 a year were much more likely to report feelings of confidence about retirement. Simply put, in order to have the best opportunity to save a person needs to develop an understanding and a plan for managing their spending as well as their savings. It’s not always easy but it definitely is possible and, if a person makes the effort to understand their spending patterns as well as having a good command of their spending, they normally do much better than people who don’t.
These ”very confident” people also have a designated retirement account according to the survey. In fact, an impressive 90% who have designated retirement accounts like IRAs or 401(k)s actually contribute to them, according to EBRI. The reason? Saving is much easier when you’ve got a vehicle in place to do it.
Another thing that these confident consumers want to do is work through retirement, but they don’t count on having to do so. Most, according to the survey, have a more realistic idea of when they’ll actually have to retire and, in most cases, that time period is earlier rather than later.
The survey also showed that there is a bit of a “reality gap” between when a consumer believes they’ll retire and when they actually do. For instance, the survey showed that 9% of workers plan to retire before the age of 60 but nearly 4 times that amount, 35%, actually reported that they had retired that early.
If you want to speed up your possibilities for retirement then you simply need to save more. Opening an online trading account is the first step in saving after tax dollars, and most companies can combine your pre-tax retirement savings accounts within the same online portal. Once you open your account I would check out all of the investment options available to you. For instance, binary options signals keeps you updated on all your binary options opportunities, making it that much easier to invest in them now.
If you are unsure of your retirement plans, have questions about your personal finances or would simply like to chat about finances in general, drop us an email and we’ll get back to you ASAP.