The $24 Billion Dollar Retirement Mistake!
03 Jun 2015
We all like free money, don’t we? I mean, free is free, right? Yet sometimes we have free money given to us and we DON’T take it! According to a new report by Financial Engines, approximately twenty-five percent of employees whose companies offer a retirement contribution match aren’t taking full advantage of it. This study looked at approximately 4.4 million retirement plans. Based on the study, the average person leaves $1,336 on the table each year, to the tune of 24 billion dollars collectively.
This does not even consider the people whom don’t contribute at all, so the number would be much higher. What’s amazing to me is that according to a recent survey conducted by Harris Poll, members of Generation X and Generation Y (from 18-54 years old) have “not being able to retire when desired” as one of their top two financial considerations. Yet, many don’t take full advantage of their retirement plan matching programs. In addition, many don’t contribute at all to their plans. As a matter of fact, 35% of Generation X’s and 50% of Generation Y’s have not prepared for retirement at all!
The same study found that only 27% of Baby Boomers (55+) are confident that their savings will see them through retirement, which is down from nearly 40% in 2011. With all these pessimistic statistics, why then aren’t more people seeking out financial guidance? I believe it’s the same reason we put off going to the doctor… we don’t want to see the results or, better yet, we fear the outcome. According to a study by the Society of Actuaries (SOA) conducted in 2013, only 52% of pre-retirees and 44% of retirees seek out a financial planner or advisor.
I know I have presented a lot of studies today, but you can often find a lot of interesting stuff in them. So if this financial stuff worries you….and 86% of Americans say it does, according to the Certified Financial Planner Board of Standards, Inc., then considering talking to a professional. As I have always said, if you lack the time, knowledge, or desire to manage your finances, then consider delegating to someone else. What have you got to lose? At least you might get your free money.
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