Of those with a financial plan, about half are on track to meet their goals, according to a report.
In comparison, respondents to the survey by the Consumer Federation of America and the Certified Financial Planner Board indicated that less than one-third of those without a plan are meeting their goals. Many may have had their progress and planning derailed in recent years as a result of the recession and accompanying economic turmoil. The report suggests that many people who had plans have been able to maintain a reasonably strong financial situation anyway, while those without have met with less success.
"In all income classes, those with a financial plan had much greater financial confidence and security," Stephen Brobeck, CFA executive director, said at a press conference. "Those with a plan are more confident about managing money and have more effectiveness with achieving financial goals, in addition to greater annual savings and net wealth."
Many people may fail to make a financial plan because it requires a degree of forethought and focus that is challenging. Because they can have such a large impact on workers through offering employee benefits, setting up retirement programs and taking other actions, employers might find it beneficial to help their workers develop their financial knowledge and plan for the future. This could strengthen talent acquisition and retention, and help improve employee loyalty and productivity.
Women experiencing shortfall in retirement savings
Female workers may be at a disadvantage when it comes to meeting financial goals, particularly preparing for retirement. The Insured Retirement Institute (IRI) recently reported that women may be subject to a 25 to 30 percent retirement savings shortfall when compared to male colleagues, which researchers attributed primarily to income disparity.
One factor reinforcing this trend is that women are more likely to become caregivers, leading to wage losses. Those who return to the workforce after such an event may find their careers slowed significantly, decreasing Social Security and employer-provided retirement benefits. This is particularly problematic because women typically have longer lifespans than men, and thus a greater need for solid retirement savings to cover their living expenses after leaving the workforce.
Only 35 percent of baby boomer women have retirement savings of at least $200,000, compared to about 50 percent of men. They do seem to be aware of their situation to an extent, with a greater number reporting concern that they may not be able to cover all medical expenses in retirement.
