One in Five Americans Doubt Their Ability to Retire Securely, Experts Urge Planning

Retirement Confidence Wanes for Many Americans

Steve Baleno, a 56-year-old engineer with over 30 years in the workforce, exemplifies a proactive approach to retirement planning. Having increased his savings annually since his first job, Baleno regularly evaluates different scenarios to ensure his plans remain on track. “It gives me the security to know I could retire,” he said. “I’m not working longer than I need to, if I don’t want to.”

However, many Americans do not share Baleno’s confidence. A recent survey by Natixis Investment Managers, which polled 750 Americans earlier this year, highlights widespread concerns. Key worries include insufficient savings, the erosive effects of inflation on retirement funds, and potential reductions in government benefits.

Survey Highlights Need for Planning Over Miracles

Despite recent gains in the S&P 500 boosting optimism, 21% of respondents expressed that retiring securely would “take a miracle.” Financial experts caution that extraordinary outcomes are not necessary to achieve retirement security.

“They don’t need a miracle, they need a plan,” said Dave Goodsell, executive director of the Natixis Center for Investor Insight. He emphasized the importance of honestly assessing future costs and desired lifestyles to formulate realistic retirement strategies.

Developing and Maintaining a Retirement Plan

Katie Klingensmith, chief investment strategist at Edelman Financial Engines, advocates for integrating all assets into a coherent investment plan. Early and consistent saving, combined with regular plan reviews, can clarify retirement goals and guide decisions on account utilization, savings rates, and investment choices.

She warned against reactive changes driven by short-term economic news, noting that such fluctuations rarely alter the long-term validity of a well-constructed plan.

Complex Variables and the Role of Financial Advisors

Retirement planning involves balancing multiple factors including Social Security benefits, pensions, personal savings, and lifestyle expenses. Goodsell described this as a “super complicated mathematical equation,” with inflation, longevity, and investment returns adding complexity.

Financial advisors play a crucial role beyond asset allocation, providing emotional support and personalized guidance. Andy Reed, head of behavioral economics at Vanguard, highlighted the value of trusted advisor relationships, suggesting that AI-driven tools may not fully replicate this human element.

Integrating Technology and Professional Guidance

Planning platforms such as investor.gov, Boldin, and Empower offer tools for tracking and forecasting financial progress. Stephen Chen, founder and CEO of Boldin, noted that many users combine these tools with professional advice, using software-generated plans as supplemental insights.

Baleno’s experience underscores the benefits of disciplined planning. Although not yet ready to retire, he finds reassurance in knowing retirement is achievable on his terms.