Lip Service Popular Retirement Planning Strategy

Two new commandments came down the retirement planning mountain over the past year: Work Longer. Save More.

Okay, maybe they aren't exactly new; let's just say newly appreciated as the soundest strategy for playing catch-up after the bursting of two bubbles in seven years left many of us way behind in our retirement planning. Actions Speak--. The weekly drip of "retirement expectations" surveys filling my inbox indicates we're on board with the working longer solution; invariably two thirds to three quarters of folks surveyed say they plan on working longer.

As for Saving more? Not so much.

According to the Wells Fargo 2009 Retirement Fitness Survey the majority of pre-retirees aren't saving more today than a year ago:

• 23 percent increased their 401(k) contributions.
• 9 percent increased their IRA contributions.

And it's not because everyone was already hitting the maximum annual contribution limits in 2008 and thus didn't have room for improvement:

• 35 percent contributed the maximum to their 401(k) in 2008
• 24 percent contributed the maximum to their IRA in 2008.

Even among high-asset individuals ($250,000+ in assets, excluding real estate) only 46 percent maxed out on their 401(k) contribution and 27% on their IRA contribution.

The Emergency Explanation My first thought when I saw those stats was to assume people weren't saving more for retirement because in the year of the Great Recession they were justifiably scrambling to build their emergency reserves.

Not exactly. Only one quarter of pre-retirees kicked up their emergency savings in 2009; while one-fifth cut back on their savings.

So much for putting money where mouth is.
A year into the new normal and it seems we really haven't changed much. Or as much as we need to. (Wells Fargo reports pre-retirees have an average of $300,000 set aside for retirement, but anticipate needing $800,000.)

Making a concession to working longer is easy. It costs you absolutely nothing today to say you expect to work longer. And I bet most folks would admit to secretly hoping/praying that some new bubble will make up their shortfall in the ensuing years so they don't really have to suck it up and work longer.

But when it comes to the other crucial aspect of fortifying the nest egg-saving more-we're still not exactly on board with the delayed gratification model of putting money aside today for a benefit that is a decade, or two, or three away. We give good lip service to the new realities of retirement planning. It's our execution that's lacking.

Wallet photo courtesy of Flickr user kevincortopassi , CC 2.0.

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