Retirement,  Savings

The Need For Financial Planning: Retirement Shortfall

The Need for Financial Planning” covers financial planning topics and ties in data suggesting the opportunity for new and prospective advisors to improve America’s financial health.


After finishing a final exam for my Income Tax Planning course (woohoo!) last week, I began my Retirement Planning and Employee Benefits course. While my previous studies have touched on retirement planning (CFA® examinations and Series 7), this course goes a lot deeper into the nuances of tax-advantaged accounts.

The retirement planning material actually grabs your attention right off the bat, so much so that I felt a revival of this “The Need for Financial Planning” series was due. I was certainly aware of the relatively low savings rate for Americans and projected shortfalls throughout retirement. However, a fresh look at the figures is rather sobering.

According to the Employee Benefit Research Institute’s Retirement Confidence Survey (2017):

  • Only 61 percent of workers have saved for retirement.
  • 47 percent of workers have less than $25,000 in total savings and investments (excluding defined benefit plans and the value of their home).
  • 24 percent of workers have less than $1,000 in total savings and investments (!).
  • 41 percent of workers have completed a retirement needs analysis or calculation.

In addition, 79 percent of survey respondents say they plan to work during retirement when in reality, only 29 percent of retirees actually choose to do so. It seems, in part, that we are a bit overconfident in projecting how ambitious we will be in our later working years. Beyond that, 48 percent of retirees retired earlier than expected for reasons beyond their control (health or employment changes).

As a new or potential financial planner, the need for your guidance couldn’t be more clear.


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