This may sound a little bit odd coming from someone who dispenses financial planning and retirement advice for a living, but one of the biggest problems I see on a day-to-day basis is people not taking enough individual control of their own retirement. The advice of a trusted and experienced professional is generally helpful, of course, but it’s only one piece of a bigger puzzle. And most of the pieces of that puzzle should come from you.
America is a nation that has long prided itself on its traditions of self-reliance and independence. These days, that spirit is more important than ever, particularly when it comes to saving for your golden years. The bottom line is this: You are on your own. You must take control of your own destiny, because many of the supporting elements that used to be there for you are either diminished or are no longer reliable.
The two pillars of long-term financial stability—your government and your employer—are no longer the rock-solid options they used to be. You can’t rely on social security, you can’t rely on a pension, and you simply cannot afford to hope for the best and expect that these crumbling institutions will still be there for you in 10, 20, or 30 years. The person who is best equipped to take care of you is…you! That doesn’t mean it will be easy, of course; the odds are still somewhat stacked against you these days. Interest rates are still low which makes it harder for savers to build their savings. They are starting to creep up a little bit, but are still really nothing to write home about.
The lack of consumer spending and years of artificially propping up the economy through unsustainable government programs means that the economy today is a fragile and vulnerable thing. Proceed with caution: some degree of risk-taking is necessary for you to take control of your long-term financial security, but you also have to be smart about it.