An Optimistic Look at Our Retirement Profile

by Marc Bastow | August 22, 2013 9:03 am

If you want to find a way to take a bullish sign on retirement planning habits and make it appear bearish, all you have to do is work “bear” into a headline.

For all the angst over the retirement savings and planning habits of America — and there are many — slowly but steadily we’re coming to grips with the reality that we have to take more control over the financial future.

A recent example of the new reality: a 1,000-person survey of 401k participants[1] from Charles Schwab showing just how dialed-in we are becoming with regard to retirement savings.

The highlights:

Considering much of the doom and gloom over how much we have saved (not enough), how many people are actively engaged in 401k savings (too few), and the long-term outlook for a “comfortable” retirement (pessimistic), these are some heady numbers.

Retirement planners can’t say it enough: We’re in a “do-it-yourself” world[2] now, with the older put money into a fund and let the company make the investment-pension plan model — the defined benefit plan — virtually extinct. As more and more people take that first, important step of understanding that they must view retirement planning as a pro-active activity[3], the long-term planning begins.

However, we’re not so bullish on the other side of the retirement coin: how to deploy assets for retirement. In the same survey, 46% of respondents said they don’t know their best investment options[4], and 34% say they are stressed over their allocations.

The truth is there are no easy answers here, and no static ones, either — the best investment today might not be the best one in a year from now. The best thing you can do is stay vigilant in your research, diversify not just among asset classes, but within them, and stay cost-conscious when it comes to mutual funds and exchange-traded funds (a fraction of a percent here and there adds up over 40 or 50 years).

To me, the takeaway here is that Americans are making progress on becoming more actively involved in our retirements. How we get there might be more in limbo, but it’s something you can take control of — and there’s comfort in that.

Marc Bastow is an Assistant Editor at As of this writing, he did not hold a position in any of the aforementioned securities.

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  1. 1,000-person survey of 401k participants:
  2. a “do-it-yourself” world:
  3. retirement planning as a pro-active activity:
  4. don’t know their best investment options:
  5. Sign up for our Retirement Insights e-letter:

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