by Phil Cannella
The Employee Benefits Research Institute (EBRI) released its yearly Retirement Confidence Survey (RCS) on Tuesday this week, and the results were not exactly looking rosy. The survey found that retirement confidence took a dip this year, after rising slightly in 2012. It seems that retirees now are much less confident that they will have enough money in their savings to make it through retirement.
The EBRI has been conducting the RCS since 1993, measuring confidence about retirement by surveying people in or near retirement about how much money they have saved and how it compares to the amount of money they think they need. The respondents are ranked according to their responses on a scale the runs from “very confident” at the high end to “not at all confident” at the low end.
The number of people who were “very confident” about their retirement savings remained fairly steady during the 90s, but took a big dip once the Great Recession reared its ugly head. The RCS shows a noticeable decline in retiree confidence after 2008, for obvious reasons. Many people in or near retirement took a big hit to their nest eggs that year, and many still haven’t recovered.
Although the results of the RCS are very telling, I think there’s a bigger reason why people aren’t confident in their retirement savings. It’s very simple really: people aren’t making a plan for the future. If you don’t plan for a secure retirement, you’re not going to end up with one. Part of that is changing your investment strategy as you get older. The reason so many people lost their nest eggs in 2008 is because those people were invested in risky securities-based financial vehicles like stocks, bonds and mutual funds.
If these same people had known that there are alternative investments outside the securities industry, they would have been protected against market crashes. If they had Crash Proofed™ their nest eggs, they might be a bit more confident in their ability to retire today.
So if you’re reading this, let the RCS be a lesson to you. Far too many people are unprepared for retirement. If the EBRI was surveying you, would you be a “very confident” person, or would you be a “not at all confident” person? If you fall into the latter category, maybe it’s time you started thinking about how a Crash Proof Retirement™ could help you achieve a financially secure future.
Phil Cannella is the founder and CEO of Retirement Media, Inc.