Start preparing for retirement: Save, gain confidence in investing

By Kevin Theissen
Skygate Financial Group LLC 

Almost 50 percent of Americans are either “not confident” or just “slightly confident” in their ability to make the right investment decisions for their retirement accounts. This is according to the Federal Reserve Board’s third annual Survey of Household Economics and Decision-making.

Many Americans don’t spend time on preparing for a successful retirement and, as a result,  are uncertain on what to do and how to do it. Although uncertain about saving and investing for retirement, they don’t find the time to educate themselves. Finally, many don’t know where to go for help. This becomes a cycle of procrastination, stress and sleepless nights – until they finally do something about it or it’s too late.

Key findings from the report

Retirement

• Thirty-one percent of non-retired respondents report that they have no retirement savings or pension at all, including 27 percent of non-retired respondents age 60 or older.
• Forty-nine percent of adults with self-directed retirement accounts are either “not confident” or only “slightly confident” in their ability to make the right investment decisions.
• Just over one-quarter of adults with self-directed retirement accounts do not seek out any financial advice when investing these funds. Fifty-two percent of those who do not seek out advice say they either cannot afford assistance or would like help but do not know where to get it.

Economic Preparedness

• Nearly half of adults are ill-prepared for a financial disruption and would struggle to cover emergency expenses should they arise.
• Forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.
• Twenty-two percent of respondents experienced a major unexpected medical expense that they had to pay out of pocket in the prior year, and 46 percent of those who say they had a major medical expense add that they currently owe debt from that expense.

Bottom line

If you haven’t already, start saving now. Make it a priority. Save at least 10 percent of your income and shoot for up to 50 percent. Educate yourself on the basics and seek out advice from an experienced, independent, fee-based investment advisor or financial planner.

For the full report, click here: Report on the Economic Well-Being of U.S. Households in 2015 (PDF)