Knowledge is power. We’ve all likely heard some version of this famous proverb. It’s oft attributed to Francis Bacon who included the Latin “ ípsa scienta potestas est” in his writing. Knowing what to do is good, and knowing how to do it sure helps. Put those together and you have a recipe for success.
Sadly, when we look at the state of American’s retirement readiness we find that a fair number of folks aren’t ready for retirement and know they aren’t ready as well. A recent report by the Employee Benefit Research Institute tells us that there are still a fair number of families that don’t feel very confident about their chances for income sufficiency when they stop working. 49% of those surveyed feel less than comfortable with their ability to retire and that number hasn’t changed significantly since the record low confidence numbers recorded in 2011.
Here is where the knowledge/power comes in. Only 46% of respondents indicated that they had ever tried to calculate just how much they would need to ensure that goal. That’s just about ½ of the population flying along on a wing and prayer. Not very encouraging. But interestingly enough the feeling of preparedness and sufficiency was increased in people that had taken the time to do some basic retirement planning. It seems like the better we prepare for something the more likely we are to achieve it.
The takeaway for us is that planning can make a huge difference in people’s lives. Constructing and implementing a retirement savings program, working with a spending plan to “pay yourself first” and taking stock of your risk management/insurance programs all make a tremendous difference in people’s lives.
We’re encouraged by the number of Americans who done retirement and general financial planning and a little troubled that we’re not seeing more people do the same. We’ve a long ways to go to make basic financial literacy an integral part of our nations psyche. So when you get a chance remind folks that “knowledge is power” and encourage them to make a difference in their lives through planning!