When it comes to saving for retirement, I’ve heard countless people tell me why they’re not taking action. "I want to play now and save later." "I don’t have time to think about it at this stage in my life." "I’m looking at a pile of debt." I’ve heard every excuse in the book!
There’s another reason some people aren’t saving for retirement—and it might surprise you.
The Facts Don’t Lie
Recently, my team used a third-party research panel to survey adults about retirement. We wanted to know how much people are saving, how they feel about retirement, which age group is most prepared, and much more. And we’re learning a lot about the state of retirement in the U.S., including who seeks out information on retirement education. Here’s what the study found:
- Nearly 40% of upper-income workers (those who make $75,000 or more) have consulted a financial advisor, compared to 10% of lower-income employees (those who make less than $25,000).
- Thirty-six percent (36%) of upper-income employees have read books on retirement, compared to 11% of lower-income workers.
- Thirty-six percent (36%) of upper-income employees look online to find more information about retirement. On the flip side, just 22% of lower-income workers do the same.
Do you see a pattern? I do! Upper-income workers spend a lot more time learning about retirement than people who make less money. That’s a problem. People with lower incomes face enough challenges in saving for retirement without adding a lack of knowledge to the mix!
The Source of the Problem?
Why don’t lower-income employees spend more time learning about retirement? Part of the problem may be a lack of information from their employers. The study showed that 64% of lower-income employees say their companies don’t provide any education about retirement or financial wellness. On the flip side, just 29% of upper-income workers say the same thing.
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Another issue at hand is a myth about retirement. Lots of people think that they’ll never be able to save enough money to enjoy the retirement of their dreams because they just don’t make enough. They think that only rich people get to retire and do the things they’ve always wanted to do. With that myth in the back of their minds, they don’t seek out retirement education. They mistakenly believe there’s no reason to save for retirement because they won’t ever be able to get there.
And that’s a big lie.
The Millionaire Janitor
You probably don’t know who Ronald Read was, but in a little town in Vermont, he’s considered a local hero. An extremely quiet man, Ronald worked at a gas station for 25 years then spent another 17 years as a janitor at a local clothing store. He shocked his community when, at his death at age 92, he donated more than $1 million to the local library and almost $5 million to the local hospital. Despite making blue-collar wages his entire life, he had managed to save and invest enough to amass a whopping $8 million before he died!
Up to that point, nobody ever suspected that he was a millionaire. The locals said he always wore old flannel shirts and spent his free time collecting fallen branches for his wood stove. He splurged by buying breakfast at the local coffee shop. The only hint of his wealth was his affinity for The Wall Street Journal.
Why do I tell you this story? Because it proves that becoming wealthy isn’t just for people who make six-figure salaries. Saving and investing isn’t a rich person thing. It’s a smart person thing. And smart people (like Ronald Read) get the most information possible. They try to learn as much as they can so they can make the best decisions possible.
Saving and investing isn’t a rich person thing. It’s a smart person thing.
It’s Up to You!
If your employer offers retirement or financial wellness programs, take advantage of them! Don’t take those benefits for granted. Attend the lunch-and-learns, grab the brochures, and ask questions. If your company doesn’t offer retirement education, it’s up to you to learn from other sources! You need to be proactive in finding out the information you need. Talk to an investment professional. Take online classes. Read books.
It’s your retirement, so you need to take charge of learning the best ways to save and invest for it. Then make a plan and take action!
Not all companies provide education on retirement or financial wellness. But your company could. Do you want to be a part of the solution, and help bring a financial training program to your company? Check out Dave Ramsey’s financial wellness program, SmartDollar to learn how you can help.
A popular and dynamic speaker on the topics of personal finance, retirement and leadership, Chris Hogan helps people across the country develop successful strategies to manage their money, both in their personal lives and businesses. His new book, Retire Inspired: It’s Not an Age. It’s a Financial Number, released in January 2016 and is a #1 national best seller. You can follow Chris on Twitter at @ChrisHogan360 and online at chrishogan360.com.