There appears to be a shift away from what, heretofore, have been dismal findings on Americans’ retirement preparations. You’ve heard them. You’ve read them. And we’ve certainly written about 
them, all the stories positing the harsh reality that many people nearing retirement in today’s workforce can’t see themselves ever affording it.
Enter a recent piece in USA Today suggesting “Americans are finally doing something right when it comes to saving for retirement.” It cites a report from Fidelity, based on a poll of 4,650 people, showing more households are on track to cover essential expenses in retirement today than in 2013.
To conduct its research, Fidelity issued each household a score based on how well they’ll be able to cover basic expenses — food, shelter, healthcare — in retirement. The number of households that scored an 81 or above, meaning they can cover at least the basics, increased to 45 percent, up from 38 percent in 2013, the last year Fidelity conducted the study.
At the same time, the number of households that need to make adjustments to retirement plans in order to have enough money saved decreased to 32 percent from 43 percent in 2013.
As John Sweeney, executive vice president of retirement and investment strategies at Fidelity, says in the story, “[p]eople are becoming more aware of the fact that they need to take control of their own retirement, and they need to save more.”
Bert Doerhoff, CPA and founder of Jefferson City, MO-based Aura Wealth Advisors, cautions in this more recent piece about the study that we shouldn’t overlook the fact that one-third of Americans are still failing to prepare for retirement. So don’t start throwing confetti just yet.
As that piece states:
“Many factors contribute to the increased savings rates for retirement, including an improved economy and Americans becoming more aware of the importance of saving for retirement. Many investors are becoming increasingly educated about the individual nature of saving; it is up to each individual to secure their future.
“Doerhoff notes that getting started early is one of the keys of careful retirement planning: ‘Starting too late in life means you have to do most of the saving rather than letting your money have time to work for you and grow while you work.’ Doerhoff also mentions another reason why it is critical to save money early in a career: [A]n unexpected health problem could move an investor into retirement long before planned.
“Doerhoff adds that even during times of market fluctuations, [investors should be encouraged] to observe the basic tenets of successful retirement planning, such as starting early and investing for the long term. ‘A market downturn, like the one in early January 2016, can spook investors and cause them to move money that really should be left alone to recover from the volatility,’ he says.”
