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5 Types of Retirement Savers

5 Types of Retirement Savers

Originally aired 5/12/2021

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Did you know your personality and behavior can impact how you save for retirement? On this episode of the Get Ready For The Future Show, we’re talking all about the 5 types of retirement savers!

You’ll learn:
– What type of retirement saver you are
– How your behavior might impact how you save for retirement
– One important step to take to help you stay on track

Links:

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Register for our Maximizing Retirement Income with Social Security Webinar (Replay Available)

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SHOW NOTES

All Aboard the Struggle Bus

  • How you’re hardwired to think and your behavioral habits can have an impact on how you save for retirement! On today’s episode, we’re talking about the 5 types of retirement savers!
  • Almost half of all Americans who have yet to retire are anxious that they won’t have enough savings to live comfortably in retirement.
    • Even so, only about one in three people in their 50s say that saving for retirement is their greatest financial priority, while more than half say it’s simply covering their basic living expenses or paying down debts like credit cards or a mortgage.
    • And of those that are offered a 401(k) from their job, fewer than one in three are contributing more than 10% of their income. (Transamerica)
  • So, what steps can you take toward financial independence? How can you shift the focus to plan for the future you dream of?
    • Throughout the show today, we’ll be talking not only about the 5 types of retirement savers, but practical steps each type can take to grow!
  • Uncertain Strugglers
    • This group makes up about 29% of the population.
    • “Uncertain Strugglers” are more likely to rely on instinct and recommendations from family and friends to make financial decisions.
    • Over half of this group is age 45 or over, but they don’t know much about retirement planning, don’t have a financial plan, and haven’t calculated income needs in retirement.
    • People in this group are generally pessimistic about living comfortably in retirement, with many expecting to rely on social security and help from family to get by.
    • Only 24% expect their savings and sources of income to last through retirement, the lowest percentage among the 5 types
  • Tips for Uncertain Strugglers
    • Don’t rely on Social Security alone
      • The estimated average Social Security retirement benefit in 2021 is only $1,543 a month.
    • Take steps toward financial independence
      • Take hold of the resources you have and start taking steps toward developing a plan.
    • Know this:
      • You aren’t bad at planning.
        • We get that the idea of creating a financial plan can be overwhelming, or intimidating. You worry that you don’t “know enough” about it to do it well. That you might even be “bad” at money.
        • This perceived shame holds people back from making better decisions. Fact is, you’re not expected to know anything. Because unless you’ve spent years studying the behavior of money, how would you know?
        • Being “good” at money isn’t knowing something you were never taught, but choosing a team you can trust to guide you through it.
      • Where you come from isn’t where you’re going.
        • Most of the people we work with hail from humble beginnings. Some weren’t even that lucky.
        • Where you come from is an unchangeable fact, but it does not and should not dictate where you’re headed—or what you’re capable of. We should know. We’ve been there ourselves.
        • How you feel about your past, or even your present, shouldn’t get in the way of planning for your future. You simply can’t afford to let that happen.
        • You don’t need special connections, insider knowledge, or a particular pedigree to get the support you need.
  • Find out if you’re on track.
    • How likely are you to have a successful retirement? Click here to get your checkup now. Best part? It’s totally free.

A Dream is a Wish Your Heart Makes

  • Optimistic Dreamers
    • This group makes up only about 13% of the US population.
    • It’s a younger group: nearly half are under age 45 and 26% are under age 35.
    • Retirement seems far away for this group, but they plan to lead active, rewarding lives as seniors.
    • They have a basic understanding of retirement planning and contribute to their employers’ plans, but aren’t fully comfortable with retirement planning and don’t spend much time on it.
    • Few have calculated income needs in retirement, and many make financial decisions based on instinct or through recommendations from family or friends.
  • Tips for Optimistic Dreamers
    • Take the next step toward financial independence.
      • A basic understanding and a 401k likely won’t get you very far.
      • Calculate your income needs in retirement and base your financial decisions in strategy-based logic rather than suggestions from your family and friends.
        • Work with a trusted advisor to help you.
    • Without a plan, the future just happens to you.
      • The future can’t be what you want without planning for it. In some ways you can’t have a future without a plan; because all you really have is what you’re doing now and a hope that it all works out.
  • Ambitious Risk Takers
    • This group makes up 28% of the US population.
    • Ambitious Risk Takers are generally young and optimistic.
      • They are more likely to be open to new and different opportunities
      • Nearly half are under the age of 45, and 28% are under 35.
    • 43% have a financial advisor.
    • 75% expect their income sources to last through retirement.
    • They trust financial advisors but do their own research and are more likely to consider themselves experts in retirement planning.
  • Tips for Ambitious Risk Takers
    • Just because it’s called financial independence doesn’t mean you should do it alone.
      • Maybe you think that if you were “really” independent (or smart, or savvy), you would do all of this yourself. You would save a little on fees and pick your own stocks.
      • The problem is: Few, if any, become financially solvent or cultivate wealth that way.
      • True financial independence isn’t doing this on your own; it’s knowing who to ask and when to listen. You may worry that you can’t afford the fees. But what you really cannot afford is a mistake.

Preparers and Planners

  • Cautious Preparers
    • This group makes up about 17% of the US population.
    • They tend to be older: 68% are over age 45, and 20% are 65-75.
    • Many have prepared for the worst and stuck with tried-and-true investment strategies.
    • Though Cautious Preparers have knowledge about retirement planning, they still have questions, so they do their own research and rely on experts.
    • Some have calculated their retirement income needs, and 27% are already retired (the highest percentage among the 5 savers).
  • Tips for Cautious Preparers
    • If you haven’t calculated your retirement income need, now is the best time to do it.
    • How you spend your assets matters.
      • We often hear people who have already stepped into retirement saying they think it’s too late for a plan to do any good for them.
      • While we can’t go back in time and change the way you’ve saved, we can help you make the most of what you have.
    • Instead of preparing for the worst, plan for the best.
      • Your plan isn’t the life preserver, it’s the boat.
      • Your financial plan isn’t something you have to put on because someone tells you to. And yet, that’s how many people treat their money—something to stow away under a seat in case a storm rolls in and things go south quickly.
      • The best financial plan doesn’t assume you’re going to drown; it assumes you have a place to go and need a way to get there.
      • Having the right plan for you means not having to function in emergency mode. It means you’ve taken all possibilities into account. It means thinking beyond “just in case” to having a robust, definitive income plan, so that even if you don’t know what will happen, you’ll know you have options.
  • Purposeful Planners
    • This group makes up 12% of the US population.
    • Many are nearing retirement or have already retired: 42% are 55+.
    • Purposeful planners are often well-positioned to enjoy retirement.
      • Most have a financial plan, devote time to retirement planning, and have a good amount of knowledge about retirement planning.
    • 78% expect their sources of income to last throughout retirement (the highest percentage among the 5 saver types).
  • Tips for Purposeful Planners
    • Continue to meet with your advisor and focus on your plan.
      • Your plan is a living, breathing document that grows and changes with you.
      • As your circumstances change, your plan should evolve.
    • Pass it on.
      • If you’re well-positioned for the future you dream of, the best next step we could think of is to help someone else take the steps to get there, too.
      • What financial knowledge and tools got you to where you are? How can you help someone a few steps behind you get started or stay on the right path?

What’s the Plan?

  • No matter which category you fall into, we all have some room to grow.
    • You need a plan and a relationship with a trusted advisor to guide you through your financial journey.
    • Your advisor can help you:
      • Navigate concerns about retirement
      • Address risks and possible blind spots
      • Build a plan that works toward your goals
      • Understand the bigger picture of retirement
      • Avoid emotional decisions that could throw you off track
    • Feeling prepared and being prepared are two different things.
      • Don’t just hope for the best. Plan on it.
  • MoneyGuide
    • Goals-based planning to keep you on track to and through retirement.
      • This program is designed specifically for those who are in the middle of their financial journey and need a coach to guide them as they balance family and finance. If that’s you, MoneyGuide is a great place to start.
    • Click here to learn more.
  • The GenWealth Ready to Retire Process
    • Income-based planning to help you put your hard-earned money to work for you.
    • Built specifically for those 5-10 years from retirement.
    • It covers 7 key areas:
      • Investment strategy
      • Social Security Maximization
      • Creating guaranteed income to meet your basic needs
      • Protect against inflation and providing for lifestyle income
      • Address long-term care needs
      • Reducing taxes during retirement
      • All documented in a written plan (on paper, on purpose)
    • Click here to learn more.

FINAL THOUGHTS

    • Which type of retirement saver are you?
      • Uncertain Struggler
      • Optimistic Dreamer
      • Ambitious Risk Taker
      • Cautious Preparer
      • Purposeful Planner
        • And what can you do now to be better prepared for the future you want?
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    • Whatever kind of saver you are, you need to know if you’re on track.
      • Find out your likelihood of a successful retirement!
      • Click here for your free checkup.