People are stressing more about retirement. At the same time they are saving less. Do you see a disconnect?
Michael Doshier, vice president of retirement marketing for Franklin Templeton, says the survey did not ask people why they weren’t saving. But generally, people say they can’t afford to or they didn’t have their priorities straight.
“It’s like diet and exercise,” he says. “You know what the right things are, but it’s hard to stay the course. Those that do have a plan, have a (financial) adviser and are saving, their stress levels are much lower than those who don’t.”
There were a few other surprises in the survey, Doshier says.
Boredom in retirement is a major concern — until they retire. For people under 34, boredom is one of top three concerns about preparing for retirement. When you ask retirees, only 6 percent said they were worried about being bored. Most retirees seem to be pretty satisfied.
Seniors aren’t necessarily working after retirement age because they have to. “We did notice a fair amount saying they were working not because they had to, but they wanted to,” Doshier says. “Thirty percent said it was their decision. For those 65 and older and still working, 35 percent said the main reason is they just enjoy working.”
Question of the Week
Despite all the best places to retire lists, most people stay where they are when they quit work. Do you want to retire where you live, or would you prefer to go elsewhere? For those already retired, why did you make the decision to stay or move?
Last week’s question of the week
You’re sitting down talking to your 30-year-old millennial neighbor. It’s a one-on-one conversation. What piece of advice would you give him or her to prepare for retirement?
Dennis Ruane wrote:
If offered, take any matching money from 401(k). Invest in passively managed (index), broad coverage funds: U.S. and international if available. Otherwise seek out low-cost options within 401(k) options and express your desire for options to use low cost index funds. If eligible, invest in Roth IRA using same low cost investments in index funds. Don’t switch investments around, select a reasonable asset allocation, such as 70 percent U.S. and 30 percent foreign, and maintain it by adjusting future contributions.
Mary Smart wrote:
Pay off all your debt before retiring, even your mortgage, if you possibly can.
So if you’re 30, what to do now is live within your means, saving what you can, and avoiding debt — have an emergency fund so bad surprises don’t put you into long-term debt. It gives you a sense of security and feeling of control to pay as you go without paying now for things bought years ago (credit card debt, unnecessary car loans).
Alan K. Homer wrote:
Don’t wait, start putting into a 401(k) plan now! 50 percent pretax, 50 percent Roth IRA. As raises come always take 1 percent and add to the 401(k).
Even if you lose your job, the 401(k) can grow on its own. . . . Let time be on your side. You’ll thank me 30+ years from now.
Brett King wrote:
I would tell my 30-year-old millennial neighbor to pay himself first, meaning set aside funds out of every paycheck which are geared for retirement, because what you don’t see you can’t spend. Have those pre-tax dollars going into a 401(k) plan which will compound over many years along with any employer matching contributions. If your company also offered a Roth 401(k) option it would make sense to split those contributions 50 percent/50 percent as a tax hedge.
Jim Ward wrote:
By the time you retire, pensions will no longer exist. You’ll have to do it yourself through a 401(k). But which fund? Find an accountant you trust and ask what mutual fund she likes. As you move from job to job, keep rolling over your 401(k)s into that fund. Then relax. America is a rich country. If the stock market tanks, your cohort will tank, too. You’ll only be unhappy if you were the doofus who tried to zig when everyone else zagged.
Tom C. from Ohio wrote:
Don’t think of it as “retirement,” instead think of creating “financial independence.” In other words, you aren’t denying yourself now by “saving for a rainy day.” You are building sources of income that don’t depend on you having to show up for work and toe someone else’s line.
My most recent retirement column: Should you pay off that mortgage before retirement?
Michelle Singletary’s last column: A guide to help graduates ace their job interviews.