Failure to Plan

‘If you fail to plan, you are planning to fail!’ – Benjamin Franklin 

Ol’ Ben Franklin may be the originator of that quote - or perhaps the most famous American to state it - but it is, in fact, a time-honored syllogism proven true over and over again.

This morning, I was shocked to get a reminder of this truism when reading about financial planning, retirement planning (or a profound lack thereof).

I logged on to LinkedIn this morning just before I headed out the door. Since I had a few minutes, I decided to participate in a LinkedIn poll about retirement planning. The question was: If you retired today, how many years would your retirement savings last? 

The poll gave you four choices: 0 years, 5 years, 15 years, or 20+ years. The goal, of course, is '20+’ but I answered conservatively (based on current figures) and said '15.’

Lisa and I have been fairly proactive about long range planning. I figured most people would agree.

I was shocked at how greatly my answer was in the minority.

I realize this is a small sample - and not at all scientific - but only about one-third of those responding to the query answered '15’ or '20+.’ That means a whopping two thirds of those surveyed feel they have enough retirement savings to last only five years…or none at all.

To me, that should be a huge wake-up call to anyone listening.

What is the reason for this?

• The age demographics on social media sites, such as LinkedIn, skew very young.
• We are part of a 'live for today and take our chances on tomorrow’ society.
• Most users on LinkedIn are actually 80+ years old.

As much as I like to bet on The Greatest Generation over and over again, I’m going to take the first two possible answers on this one. 

If you are a part of the first group (let’s say you are 25 or younger…or even <30), you have time to act. But do it quickly.

Start saving for retirement. If you didn’t start it yesterday, start it tomorrow. I once heard the notion of retirement planning as kind of like watching a snowball gather mass as it goes down a hill. Obviously, the higher up the hill you are when the snowball starts, the bigger it will be at the bottom.

Even if you can only start contributing a little bit to your 401K plan, your 403B plan, a Roth IRA or any other means of savings, do it today.

Now, if you are a part of the second group, tsk tsk. 

Sometimes, I fear that people my age (or slightly older or even slightly younger) get caught up in collecting the trappings of life rather than getting serious about putting a little back for tomorrow. They want the biggest/brightest/grandest (fill in the blank). They may or may not be able to afford it. 

I think some of those purchases go on a great big credit card. And, I think it takes some folks an incredibly long time to dig out of that kind of debt. Or maybe they don’t.

Perhaps they don’t even care. 

But you don’t need Dave Ramsey  to tell you that you can’t spend more than you make. Or if you do, you’ve got a problem.

Still, there’s time for folks in category two to act. Go ahead and start that retirement savings plan tomorrow. You just have to make the commitment to do it. If you don’t know where to start, the HR professionals at your office, friendly staff at your local bank or a certified financial planner can point you in the right direction.

Maybe you might have to put back a bigger chunk to meet your long-term goal but you can still get there. The bottom line, though, is a failure to plan is…well…what Ben said.

JG

Originally posted 10/30/2013