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Resolve to be free

By Barbara Whelehan ·
Friday, December 30, 2011
Posted: 3 pm ET

Are the American people hard and tough about their personal finances, or soft and flabby? Are they taking control of their financial lives or letting them spiral out of control? As we face the New Year, there's no better time to do a self-assessment and make some resolutions.

In recent weeks, several financial companies took the pulse of the public to discover what's important to the American people. Their ulterior motive may be to offer financial products to paying customers, but the results are worth a moment of reflection nevertheless.

An attitude of self-destruction

A stunning 8 out of 10 Americans said they will not focus on financial planning in 2012 -- in a sort of weirdly defiant way. According to Allianz Life, that's the highest level in its survey's three year history, above the 67 percent level recorded in 2009 and 2010. The main reason for the lack of financial focus: the prevalent belief that "they don't make enough to worry about it" (35 percent). It's understandable to be discouraged if you're earning less than you'd like, but all the more reason to conduct a thorough analysis so you can best utilize your available resources.

ING's "Retirement Revealed" survey found that 7 out of 10 Americans do not have a formal investment plan in place to help them reach retirement goals. And even though 75 percent of survey respondents are contributing to their workplace retirement plans, 48 percent feel unprepared for retirement. That feeling of unpreparedness is also understandable and widespread, I think, because it's a huge responsibility for individuals to manage investments so that they can sustain themselves for several decades during their so-called golden years.

Prudential is running "Day One" TV commercials of people on their first day of retirement. One showcases Nadine, a woman who's happy to wake up without an alarm clock. She says, "I don't know how much money I need, but I know whatever I have, that's what I'm going to live within." The message is similar in other ads in that campaign. One newbie retiree says, "To be content, you have to want what you got."

The youthful population gets it

Retirement is both an enticing and scary prospect, no matter how much (or little) money you amass. But there's no question that the more you can save, the higher your likelihood for retirement planning success.

And it's heartening to read that young people are saving more diligently than their parents. A survey conducted on behalf of TD Ameritrade found that 25 percent of Gen Y and 23 percent of Gen X respondents are funding both their workplace plans and their IRAs. Meanwhile only 16 percent of baby boomers are doing the same.

Maybe the younger set understands the tradeoffs of living for today versus saving for tomorrow. Or maybe they're repelled by the extravagant spending behavior of their boomer parents. They see us go on a spending binge, followed by a protracted hangover to pay off the purchases, and living the mantra, "We owe, we owe, so off to work we go."

Or maybe they understand that saving for retirement is their ticket to freedom.

Are you planning to increase your contributions to your workplace retirement plan in 2012? Just do it.

Best wishes for a healthy, happy and prosperous New Year.


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