- Only a third of Boomers have done any retirement planning in the last two years, according to a survey.
- Unsurprisingly, even fewer Millennials and Gen Xers have started planning for retirement.
- The most important thing when it comes to retirement planning is starting as soon as possible and resisting the urge to give up.
- It’s also very important than you set goals that are realistic and measurable, so you can continuously check that you’re on target for a comfortable retirement.
Around 30 percent of Baby Boomers who are nearing or just starting retirement haven’t done any financial planning in the past two years for this often financially challenging period of life, according to a survey by the National Association of Personal Financial Advisors (NAPFA).
Despite a large proportion of Boomers not planning for retirement, they still come out ahead when compared to Millennials and Gen Xers, with just 50 percent of these two generations carrying out any sort of retirement planning.
Worryingly, a third of Millennials and Gen Xers think they’ll never be able to retire – and many will ultimately be completely reliant on Social Security payments to get by.
The NAPFA survey found that around one in six Baby Boomers are unsure about how much money they will need to comfortably retire.
Lauren Zangardi Haynes, a financial planner at Spark Financial Advisors in Richmond, Virginia, said she was surprised by the numbers and stressed the importance of Boomers and all Americans planning for retirement as soon as possible.
“Taking action will help you feel less stressed and more prepared for retirement,” she said.
What’s the Best Approach to Retirement Planning?
Aside from getting started as soon as possible, there are many other things that you can do to improve your financial situation in retirement.
It’s very important to set yourself financial goals that are realistic and measurable, so you can track your progress and make sure you’re on course to enjoy a comfortable retirement.
These goals can be set in a multitude of different ways, such as saving a certain amount of money each month or having a certain amount of savings at different ages.
Before setting these goals, it’s important to have a good look at your financial situation to determine what you can realistically afford to save. The importance of this cannot be overstated, as setting unrealistic goals and inevitably failing to meet them can be very demotivating and is likely to lead to you giving up on retirement planning.
If you are currently unable to save money on a consistent basis, then you need to urgently reduce your expenses or somehow increase your income. To achieve this, you should consider which purchases you could do without and also look to consolidate any existing debt to lower your interest payments.
As for increasing your income, you should consider working extra shifts if possible or trying to find a higher paying job. Even an extra $1,000 per year can make quite a big difference to your financial situation and the success of your retirement planning, so it’s well worth putting in the effort.
Once you have a plan in place, the most important thing is hitting your savings targets each and every month. Then, you can watch your savings gradually grow and leave you in a much stronger position when you retire.
George is the CEO of Expat Group Limited, based in Hong Kong.