According to a survey conducted by Country Financial, almost 40% of respondents say they are more confused about how to save for retirement after the financial meltdown and recession.  Knowing the passive nature of most investors, I wasn’t too surprised when I read this.  Actually, I would have been surprised if they weren’t more confused.  We’ve (the collective whole) have shattered some and are testing some pretty long standing investment theories.  But remember they are just theories.  If investing were an exact science, there wouldn’t be too much risk.

The survey goes on to say that about half of the respondents have decreased the amount they’re putting away for retirement, while 40% have moved their money to a “safer investment.”   The biggest concern I see with this train of thought is well; it’s not very well thought out.  Many investors don’t realize that bonds can lose money just like stocks.  They aren’t familiar with interest rate risk and that many corporate and government bonds have been in an environment that favors bond’s appreciating.  Specifically, that when long term rates are moving down, bond prices go up.  With the 10 year treasury rate around 3%, its pretty clear that over the long term rates will need to move up.  So, if you are reading this and considering buying bonds for safety, you must consider their duration or term.

Here is another statistic from the survey: While 48% of the respondents have decreased the amount of money they’re putting away, 53% say that the current economic conditions will not force them to delay retirement.   Houston, we have a problem!  I would strike this up to being a little but out of touch with reality and just uninformed.

They survey also found that those who are not involved in their family’s financial decisiosn are typically more pessimistic about retirement, than those who are involved.   (nodding my head; again, all this makes sense.)  58% of those who aren’t involved in making decisions about their retirement said it’s not possible for the average American to have a comfortable retirement.  They’re out of touch and therefor, can’t see a way.

These things  should be taught in school.  They aren’t hard concepts to grasp.  Once ignored they become avoided.  I mean how much more important could Calculus 101 be than learning the basics of how to save for your retirement?

In my line of work, dealing with retirement plan investors, I would guess that about 10% of them take their retirement savings seriously.  But here is the good news: If you are reading this that means you are engaged and thinking about your own situation.  You realize that you need to do something, but what?  To start with you need a plan and a strategy.  Once you are on track things get easier and clear.  In the coming weeks, look for more “how to” from The Wise Buck.  In the meantime, please share your  thoughts on your own retirement.

Related posts:

1. Retirement Advice For Those Close to Retirement