Every year, BlackRock surveys over one thousand active defined contribution participants about retirement and their workplace retirement savings plans. Sometimes the survey confirms assumptions we’ve made; other times, it surprises us.
Here is one finding from the survey that is quite surprising:
46% of participants who are NOT saving for retirement say it is because they do not know how much they will need.
It’s easy to get frustrated with the reasoning here. Clearly, saving something, even if it isn’t enough, is going to be better than saving nothing. But if you think about what these participants are really telling us, it becomes clear what the stumbling block is. What they are saying is, not knowing leads to inaction.
In fact, another survey finding, that 77% of participants would increase their savings if they know how much they needed to save, more or less confirms this. Knowledge, in this case, equals motivation.
It’s safe to assume that if you are reading this blog post, you are probably motivated already, or, you’ve been successful at getting past this roadblock. But here is something to consider. When it comes to how much we will need in retirement, none of us know. The best we can do is to narrow down the uncertainty as much as possible, be prepared for the unexpected, and most importantly, stick to your well thought out plan.