THE BLOG

Retirement Planning: Where Do You Stand?

10/24/2013 07:10 pm ET | Updated Dec 24, 2013

It's been said there are three kinds of untruths: "lies, damn lies and statistics." As a life-long Personal Finance junkie (and female financial advisor for women), I have to qualify. Yes, some statistics are just distractions. But others really do help put our financial progress in perspective.

I recently came across one such stat that stopped me in my tracks: In the latest study from Financial Finesse -- 'State of U.S. Employee Retirement Preparedness' -- 61% of respondents had never run a retirement calculation.

Have you heard about folks who hike the Appalachian Trail for 2,200 miles, end to end? Imagine if 61% of them ventured forth with no compass, no idea how long the trip would take, how much food they'd need and a single pair of sneakers. A little crazy, right? The road to retirement, likewise, is a long-haul hike that requires planning, yet this study suggests most Americans are heading in blind.

While American savers are making progress, many of us are still far behind. As Financial Finesse founder and CEO, Liz Davidson puts it: "We're... very concerned about Millennials, women, and lower-income employees who are the demographics we see at highest risk for not achieving retirement security."

Importantly, those are three very big groups. If you aren't in one (or all) of them, I'm betting you know and care about someone who is. Consider these findings from the same study:

  • Just 20% of the study's participants felt 'confident' they're on the right track for retirement preparation in 2013; a whopping 80% didn't. The bulk of these unprepared folks were young, female, or both.
  • Millenials lost ground, dropping to 17% prepared from 19%. This, despite the fact that 87% of them are enrolled in employer-sponsored retirement programs (automatic enrollees of all types generally contribute less to their plans, 3.5-4.4% as compared to 7% for active enrollees). Meanwhile, experts recommend contributions between 10 and 15% to adequately fund a retirement account.
  • Retirement preparedness among women has risen to 17% from 13%. But that's still 9 percentage points behind men. As I've written before, women face much stronger financial headwinds than men, making it even harder (and more important) for them to adopt a retirement strategy.

If raw numbers aren't your "thing," let's go back to that hike in the woods. Wouldn't you want a guidebook? Fortunately, there are many terrific resources out there. If you are young, female, and/or below your income potential, consider reading the second edition of my book On My Own Two Feet: a modern girl's guide to personal finance, or subscribing a personal finance magazine Money, or signing up for Go Girl Finance if you like to read online.

[This post originally appeared at MoneyZen.com. Photo credit Louis Leray]. For more MoneyZen in your life, follow Manisha on Twitter at @ManishaThakor, on Facebook at /ManishaThakor, or sign up to receive Manisha's MoneyZen blog via email by clicking here.