Survey: People Spend More Time Planning Car Purchase, Vacation Than Retirement Options

Friday, 22 Aug 2014 10:18 AM

By Michelle Smith

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Many people spend more time preparing to buy a car or go on vacation than they spend analyzing their retirement investments, a survey for Charles Schwab revealed.

More than half of the 1,000 respondents reported spending five hours or more doing research for their last auto purchase, and 39 percent spent more than five hours exploring vacation possibilities, CNNMoney reported.

By comparison, only 11 percent spent five or more hours analyzing the options for their 401(k). A third of the respondents admitted they hadn't even dedicated a full hour to investment research.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

Despite the overwhelmingly passive approach, half of those people felt that they were on top of their 401(k) investments. Most of the others claimed they don't know how to choose the best investment options.

For many people, not knowing is a poor excuse because free investment tools and advice are often provided as part of the 401(k) offering, CNNMoney reported. Some account holders even have the option to consult with investment advisers.

However, most people don't take time to use these resources. Only 23 percent of the survey respondents reported seeking professional help to make investment decisions.

What 401(k) account holders don't know can hurt them. Excessive fees could be whittling away their savings or their current investments may not have them on the proper growth track to ensure they have enough to comfortably retire.

But more problematic than the lack of planning is the failure to save at all. A total of 36 percent of Americans are not saving for retirement, Fox Business Network reported, citing a national poll accompanying Bankrate's monthly Financial Security Index.

Financial experts say too many people are failing to treat retirement investing as a priority.

“What concerns me most is the high percentage of people that haven't started saving for retirement,” Greg McBride, Bankrate's chief financial analyst, told Fox Business Network.

And, “many of those that are saving aren't saving all that much.”

Some people aren't too concerned about retirement investing because of age. They're young and they feel they have a lot of time. Many people haven't properly calculated the costs of living through their golden years so they don't realize how much money they will need.

Then, there are those with a risky outlook for their future.

“I have had people tell me that they love their job and intend to work until they drop, thus there is no need for them to save,” Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, told Fox Business Network.

“However, these people are not considering the potential of a job loss or medical issue that prevents them from working,” she added.

“Time is money's best friend,” Cunningham says. “Therefore, people should realize that the retirement decisions they make today have a large impact on their tomorrow.”

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

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