A Wealth of Opportunity

‘A wise man will make more opportunity than he finds.’

January 21, 2014

I surveyed the dessert menu and considered my options. Only one or two was absolutely distasteful based on my inherent preferences—no “banana anything” for this diner.

I considered the variables impacting my decision. My earlier dining choices had consequences.

I had eaten a robust salad with roasted peppers and tart dressing, followed by a rather heavy cheese and fresh herb-laden tortellini entree. Further, the dense sea-salted garlic bread and glass of Chianti contributed to a range of taste experiences that had somewhat exhausted my palate.

I might have taken advantage of the cream-doused bread pudding had I not already enjoyed a copious sufficiency of bread. Dark chocolate molten cake? Too rich. Key lime tart with raspberry sauce sounded delicious but acidic after the balsamic dressing. Vanilla bean gelato? Boring.

Research this week reveals various decisions consumers have to make with regard to retirement planning, and circumstances that impact them. Some opportunities for a secure retirement are within consumer control, others outside of it.

Spending, saving, and working habits affect the dessert of secure retirement and the opportunities to indulge later in life.

Can you help consumers know what behaviors and circumstances impact their appetites?

‘To succeed, jump as quickly at opportunities as you do at conclusions.’–Benjamin Franklin

Consumers need to be forward-thinking. How can you help them realize opportunities for success in times of changing economy and policy?

The “Push is On to Increase Social Security Retirement Age,” and this is important in making financial choices. “The full retirement age on which Social Security benefits are based was raised from 65 to 66 for most people today, and will go up to 67 for those born after 1959,” says Financial Advisor.

Some back a proposal that would “push the age to 70” as “an increase in the retirement age is one way to keep Social Security from going bankrupt.” However, advisors say “Social Security is not going broke and retirees or near retirees should not make decisions based on that flawed assumption.”

Consumers: don’t count on a comfortable retirement based on stocks and housing. “Retirements at Risk, Despite Rising Asset Values,” claims The Wall Street Journal.

“Higher stock and home values aren’t doing much to brighten the retirement outlook… Half of American households are at risk…the only real solutions are to save more and/or work longer.” The article reveals that 52% of middle-income earners are “at risk of being unable to maintain their standard of living in retirement.”

What impact does gender make in retirement planning opportunities? Apparently, “Men More Confident Savers for Retirement than Women,” notes a TIAA-CREF survey.

“Only 56% of women surveyed felt they were on track for retirement, compared to 65% of men.” Access to financial decision-making help would make women “more likely to change their savings and spending habits.”

Of those women who do seek help, 62% monitor their savings and 58% modify their spending habits—and nearly 40% alter their retirement plan asset designations as a result.

Barriers exist to accessing advice, and ultimately this research finds “perceived challenges of time and cost get in the way of experiencing the benefits of financial planning.”

A lost opportunity for women?

Geographic differences also affect employment-based retirement plan participation, according to the Employee Benefit Research Institute.  A few key points on the matter:

This brief also considers other variables and characteristics regarding participation in employment-based retirement plans, including worker age, employer type, and employer size.

How do these considerations affect your members’ choices in such retirement planning opportunities?

‘A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties.’—Harry S. Truman

Research reveals that certain obstacles prevent retirement opportunities.

The Great Recession, for example, had a big impact on consumer debt, according to “Does Household Debt Influence the Labor Supply and Benefit Claiming Decisions of Older Americans?”  “In 2007, the typical family with debt owed $70,600, up from $25,300 in 1989.” By 2010, debt payments accounted for about 18% of consumers’ disposable income.

This reality potentially affects older consumers in two ways: some decide to work longer and delay claiming Social Security benefits as they pay off debt, while others who struggle to pay debt claim benefits as soon as they are able to help make payments.

Retirement security depends on adequate income and assets to cover living expenses and debt. “It is going to be important to identify those who are financially fragile to better understand their circumstances and to look for ways to help repay their debt before retirement.”

The “Impact of the Great Recession on Retirement Trends in Industrialized Countries”is further noted by The Brookings Institution. “The average pace of labor participation increase was faster after 2007 than before” and “the trend toward later retirement not only continued, it accelerated.”

However, working longer is not always an option, though “Most Boomers Expect to Work in Retirement.” Survey results presented in this MarketWatch article indicate that among retirees, “33% say they didn’t have a choice in the matter” and age discrimination is also a problem.

Another interesting study on retirement planning and the role of employment is “Working Longer: Older American’s Attitudes on Work and Retirement.” This in-depth report uncovers consumer sentiment in analysis of existing savings, perceived comfort level with retirement financial security, expectations for continued employment, and the impact of jobs’ physical requirements.

Tiramisu finally caught my eye for dessert. Chilled, light, dash of chocolate, an edgy hint of espresso; a finale matching my circumstances.

Like me with my dessert menu, retirement opportunities for consumers are affected by earlier choices.

Sometimes circumstances allow us to revisit a missed opportunity; other times opportunity’s window closes quickly.

Sometimes opportunity is not recognized when it knocks.

A bit of effort is required to achieve financial security. Per Francis Bacon, “A wise man will make more opportunity than he finds.”






Lora Bray is a research librarian at CUNA.