What You Need to Know About Financing Your Retirement
Non-retired Americans are largely optimistic about their retirement finances according to a recent national survey conducted by Thrivent Financial for Lutherans. Unfortunately, the survey also revealed that this optimism may be misguided based on people’s actions, or lack thereof, surrounding retirement planning.
The Thrivent Financial survey found that while seven in ten Americans are confident or hopeful about their retirement finances, most respondents revealed their personal lack of attention to financial actions that are essential to ensure a secure retirement.
The survey found that most Americans (53 percent) have never estimated how much money they will need for retirement and most (51 percent) fail to regularly monitor their retirement assets. In addition, three in five have not met with a financial services provider; seven in ten have not sought retirement advice from books, magazines, television or the Web. Also, one in four Americans have personally saved less than $5,000 for retirement and one in four have no idea how much they’ve saved. In short, many Americans’ feeling of comfort is built on wishful thinking.
“Our survey reveals many Americans are operating in the dark when it comes to their retirement needs,” says Nikki Sorum, Thrivent Financial senior vice president. “True confidence can only be built by determining one’s financial needs and then developing a strategy for reaching those goals.”
Sorum suggests the first step people need to perform to prepare for retirement is to take a financial inventory of both their current needs and resources. Once done, they can then select the financial goal they hope to achieve. The larger the goal, the more time and/or resources people should expect to devote to meeting it.
“Many people develop a strategy for reaching their retirement goals, but then fail to follow through,” says Sorum. “There will always be reasons to delay your plan, but procrastinating will never help you reach your goals.”
Once a strategy is in place, Sorum recommends that people carefully monitor their progress. “Too often people believe once a plan is set in motion that their work is done,” she notes. “Life is full of change, so it is important to periodically evaluate one’s progress and adjust one’s plans as needed.” Sorum notes that part of this evaluation process may include getting rid of financial holdings that are poor performers.
“Feeling confident about the future can be a very good thing, so long as it’s based on real actions and planning,” says Sorum. “Being optimistic about one’s retirement isn’t a problem. The key is to build one’s future on tangible actions rather than wishful thinking.”
For more information about finances in retirement, visit www.thrivent.com.
Courtesy of ARA Content