Conventional wisdom holds that the retirement we will have is a function of how well we planned for it. But a new survey found that Americans who have done some planning for retirement reported worse losses, on average, than those who didn’t plan.
Many retirement planning strategies encourage workers to diversify beyond completely safe vehicles such as bonds and CDs. A Consumer Reports National Research Center poll of over 19,000 online subscribers between ages 55 and 75 on November 6, 2008 found that respondents who had planned for retirement were generally less conservative than those who didn’t. Before the financial crisis this strategy was beneficial, but it proved punishing during the current meltdown.
The survey also found that using a financial pro gave retirement savers no edge last year. Consumer Reports online readers who reported using financial planners lost money at about the same rate as those who didn’t.
But, even though they suffered bigger losses, those who planned ahead by reading books or articles, consulting professionals, using online software, taking courses, or conversing with family and friends are feeling more upbeat about their future retirement prospects than those who didn’t. The more planning methods used, the more satisfied the respondents were.
It could have something to do with the fact that respondents who consulted financial planners have a net worth about $230,000 greater than those who didn’t. But Consumer Reports doesn’t know if those people were wealthier to begin with.