Ask the Readers: How much time do you spend each year planning for retirement?
Retirement lasts a lot longer than leftovers. Yet, most people spend what equates to less than 2.5 business days each year on their retirement planning. Aetna did their own survey and found that 31 percent of pre-retirees would rather clean their bathroom or pay bills than plan for retirement. Below, we ask Queercents readers how much time they spend and how they define “planning.”
What it boils down to is a long term savings plan, but many people can’t even figure out the amount they’ll need to retire. Trent at The Simple Dollar explains A Simple Way To Calculate Your Number. Here’s how he’s figuring his number. It’s not that hard. Nor does it take a lot of time. But unless we do it, we don’t know what number we’re aiming for.
For our more scholarly readers, here’s an academic brief about preparing – or not preparing – for retirement:
Current workers anticipate using simple strategies in order to achieve these goals. More than one-third say they will simply take what they need to cover their expenses (36 percent), and 3 in 10 will try to leave their savings untouched for as long as possible (31 percent). Fewer anticipate using the comparatively complex strategies of taking only the earnings on their investments (18 percent) or taking a constant percentage or amount of money (10 percent). Equal proportions of current retirees report having used these approaches. Approximately one-third each take what they need to cover their expenses (35 percent) or try to leave their savings untouched (33 percent). Only one-quarter of retirees take the earnings on their investments (17 percent) or take a constant percentage or amount (8 percent).
Workers more likely to say they will take only the earnings or a constant percentage are those who have saved for retirement (compared with nonsavers), those who have calculated how much they need to accumulate (compared with those who have not), those expecting to receive money from a work-place savings plan, such as a 401(k) (compared with those who are not), and those with household income of at least $75,000 (compared with lower-income workers). The likelihood of planning to use these approaches also increases as their retirement savings goal increases.
So when people start saying they’ll live off the earnings of their portfolio or the passive income of their investments properties… well, that’s code for they really have a plan to get them there.
What about you? Tell us how much time you spend each year on planning and then feel free to explain in the comments section how you define “planning.”
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