According to a recent Gallup poll, Americans are more worried about retirement than at any time in the past 10 years. Gallup has tracked eight aspects of personal finance since 2001, and “maintaining their current lifestyle in retirement” has made a huge leap in just the past four years. In 2007, only 41 percent of respondents were very/moderately worried…today, that number is 58 percent.
And, it’s not just aging Baby Boomers with that worry. Among those ages 30-49, a whopping 77 percent said they were worried about retirement.
There are several factors creating this phenomenon. First, Americans have never been great savers. In fact, the average American has higher credit card debt than retirement savings. Second, plummeting real estate values have taken away a lifeline to emergency cash for a lot of folks, who in the 1980s and 1990s might have used a home equity line to buy a car of pay for college.
As a business owner, you probably know how frustrating lack of access to capital can be. Tightened credit markets have made access to capital much more difficult the past few years. So what did you do? Most likely, you brought in your CFO to develop a detailed spending plan to make sure the dollars you do have were going as far as they possibly can.
It’s the same for your employees as they contemplate retirement. They need to make sure they give every dollar a job. They need to develop a detailed spending plan to ensure they know how much is going to pay bills, buy groceries, pay the mortgage, etc. When the basics are taken care of, then they need to allocate specific amounts for retirement funds, college funds, and maybe even a little fun money on the side.
But, this is a tricky proposition. After all, most people do not have the formal training that a corporate CFO can provide. Budget and cash flow analysis is one of the services our hands-on coaching provides…sort of a CFO for the household. And, in addition to our services, there are several online budgeting and analysis tools that can help your employees do a better job of monitoring their cash flow.
Either way, whether it’s through a hands-on approach with a personal coach, or access to online tools, we are encouraging all business leaders to help their employees learn more about budgeting and cash flow management. As the Gallup numbers clearly indicate, people are scared. Employers can create a lot of goodwill with their employees by showing them services and tools that are available to guide them toward a more secure financial future.