A couple of recent studies suggest that baby boomers have been negligent in providing for their financial future.
In one study released by the lobbying group Americans for a Secure Retirement, former senior economist for the White House Council of Economic Advisors and current University of Illinois professor Jeffrey Brown noted that the decline in traditional retirement programs designed to provide a steady income could leave 77,000,000 baby boomers struggling financially in retirement.
Mr. Brown said, “People need to do a good evaluation rather than hoping that things will turn out alright. If you consume too aggressively, you run the risk that you run out of money. If you plan to live to be 100, you may lower your standard of living for many years in order to get there.”
In another study, the 2004 Retirement Readiness Survey from ING U.S. Financial Services, 67% of Americans lack a plan for “paying themselves” and have no idea what their monthly retirement budget should be.
The solution lies in determining the type of retirement you want and then building a plan that can deliver it. The question, therefore, is why so many people haven’t taken the basic step of trying to lay out their future and see how best to achieve it.
The answer may be in the ING survey which noted that half of Americans surveyed gave themselves an above average grade in retirement planning despite their poor scores on paying themselves.
Apparently, those folks have confused saving for retirement with planning for it – confusing a broad goal with a specific target.
It’s time to realize that saving without a plan is good but not good enough. Otherwise, the dire predictions about the nation’s personal financial future may indeed come true.
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