As National Retirement Planning week draws to a close, we asked NAPA Net readers to weigh in on the subject of retirement planning – and what’s holding people back.
Surveys continue to show that most Americans have never made even a single attempt to do a retirement needs calculation – while the reasons are surely varied, we asked readers what they thought might be the single biggest reason why they haven’t.
A clearly plurality (though hardly a majority, 49%) attributed it to being “afraid of the answer.” A distant second was the 34% who said they plan to do it later, while 6% each laid it at the feet of either not having any retirement savings, or simply not knowing how. The rest split between “too complicated,” procrastination, inertia, “embarrassment and the fear of judgment,” and not being aware of the need to do so.
“Since many people aren’t able to connect with an older version of themselves they don’t have a sense of urgency or importance, and that can lead people to say they’ll just do it later,” commented one reader. “Since ‘later’ isn’t specific there is no accountability, thus the can is continually kicked down the road until they gain that urgency/importance and later becomes now.”
“I think it’s a combination of ‘I don't have time for that now’ and ‘I’ll do it later,’ but later never comes,” explained another reader.
As for any special activities related to National Retirement Planning Week, only 12% had something planned, though 18% indicated “maybe,” and a robust 35% said that they “hadn’t planned to, but maybe now…” One reader said, “I didn't realize it was National Retirement Planning Week. Thank you for letting me know!” While the rest indicated they didn’t have anything planned, one reader explained that “every week is national retirement planning week!”
We received a number of additional comments to this week’s NAPA Net Reader Poll. Here’s a sampling:
“The industry as a whole (our firm included) needs to be mindful of a way to make retirement planning more exciting. I would argue the current view of talking retirement planning is only slightly more interesting than discussing tax law.”
“Planning and saving seem like a chicken-egg problem. Of course, people should do both, but is it easier to get people to plan once they’ve started saving or save once they’ve planned? I’m not sure.”
“Most people don’t make enough money to do much more than live paycheck to paycheck, and can’t afford to save for retirement.”
“We’re a TPA, so by the time participants get to us they at least have a plan available,” noted one reader. “Whenever HCEs ask me how to ‘avoid refunds next year’ the first thing I tell them is to get the non-HCEs to participate! Then I let them know about safe-harbor, QACAs, and auto-enroll. I’m thinking the automatic provisions are the best way to get people started, because instead of waiting for ‘later’ to take action, a lack of action makes ‘later’ become ‘now.’ I’m seeing more plans start their automatic enrollment at 6% instead of the usual 3% from a few years ago, and I’m also seeing more auto increase. I guess my point is we need to make it so participants don't need to do anything on their own to save, and save an appropriate amount, because if we wait for them to do something it’s just not going to happen.”
Though my favorite comment this week came from the reader who aptly noted, “We should focus on this more than once a year.”
Thanks to everyone who participated in our weekly NAPA Net Reader Poll!