What Retirement Planning? People Spare Little Time for Their Nest Eggs
Retirement is one of the biggest events you’ll ever plan for. After all, if you save for it smartly, it’s basically something like a 20-year-long vacation.
So why are we spending more time planning short getaways than preparing for decades of time off from work?
In a new survey of retirement savers, the average participant said they spent just two hours researching investment choices for their 401(k)—but about four hours researching taking a vacation or buying a new car.
In fact, more than half of people said they actually spent five hours or more looking into a new set of wheels, while a full 30% admit to devoting less than an hour to their savings.
Of course, more time meddling with your investments doesn’t necessarily mean a stronger nest egg. (In fact, research suggests that investors who micromanage their funds tend to fare worse than those who don’t.) And some of the savers in this survey might be purposely taking a carefree approach by opting for target-date funds, which automatically tie your mix of investments (and risk) to your expected retirement age.
But the truth is that 44% of savers in the survey said they don’t feel they know what the best investment options are. What’s more, 1 in 2 participants confessed that, overall, they don’t really feel on top of their 401(k)s. Bottom line? We just might feel a little more assured if we dedicated as much time to planning our financial future as we do to planning that trip to Tahiti.
Feel overwhelmed at the prospect of picking your investments? Arm yourself with the right information, by learning how to set up a retirement account here.