As we get older, financial planning becomes more and more important for the security of our futures. However, as the years go on it seems that the population becomes less sure of how to handle their financial future and do not adequately plan ahead for their retirement. This leaves many people exposed to potential financial instability when the time for retiring comes along.
It is estimated people 65 and over will comprise 20.9% of the population by 2050. This will likely raise the amount of retirees. Currently there are approximately 10,000 baby boomers who retire every day. Unfortunately, one in five of the people retiring have zero money saved for their retirements, making it difficult for them to safely retire with the hope of being financially stable. The widely cited average of 401k account balances is $60,000, an average that about 75% of account holders do not currently meet. Prior planning on the part of future retirees could likely have increased the chances of success for a larger savings at the time of desired retirement.
Statistics provided by the U.S. Bureau of Labor show that only 53% of the civilian workforce contributes to a retirement plan. With only half of the working population utilizing a retirement plan the others are often left lacking in funds when they come to the age of retirement. With the lack of knowledge in the younger generation, it does not look like they are looking into any financial planning either, as 41% of people ages 18-29 years old say they have never thought about retirement planning or wealth management.
The financial planning of the current population revolved mostly around contribution plans. The most common tool used for retirement savings are defined contribution plans such as a 401 k or 403 b, which approximately 44% of the people surveyed currently utilize. There are 638,390 defined contribution retirement plans in the United States, according to statistics provided by the U.S. Department of Labor.
With the uncertainty in the current population about retirement and the lack of ability or knowledge to plan for the future people are missing out on a crucial life step and potentially hindering their futures. If you are unsure about investing or how a retirement plan works then getting involved with financial advisors is the best option for you. Financial planners can help you figure out where you should be focusing your money and attention for maximum growth. With their knowledge and experience you will have the opportunity to learn all you need to know about financial planning and your retirement plan to secure yourself a more stable future.