According to the “2013 Planning & Progress Study” conducted by Northwestern Mutual, one-third of survey respondents say “slow and steady wins the race” best describes their approach to future financial goals.
The study found those ages 55 and older believe the best financial decisions they ever made include:
- Saving early (40%);
- Paying off a mortgage (40%);
- Bought real estate at a good price (29%);
- Invested heavily in their 401(k) plan (27%); and
- Made sure their family was protected (22%).
Respondents between the ages of 25 and 54 said the best decisions they will have to make in the coming year are:
- Starting to save early (53%);
- Making sure their family is protected (52%);
- Relying heavily on their 401(k) plan (25%); and
- Buying real estate at a good price (20%).
“Interestingly, there’s consistency across generations with Americans valuing the importance of saving, paying off debt and managing risk,” said Greg Oberland, executive vice president at Northwestern Mutual. “We often say that people can’t expect to invest their way to prosperity, but rather see investing as one component of a larger holistic plan. This data indicates that’s a message that is resonating.”
“On one hand, we’re seeing strong evidence that people are saving more,” Oberland added. “On the other, we know that half of all Americans have no long-term plan in place, and nearly a quarter are taking on more risk than they would prefer because they feel the need to play catch-up.” (see "More Risk, But Not by Choice")
Oberland noted that a gap could exist between what people aspire to achieve and what actions they actually take. Nearly one in four (23%) Americans would like to be more cautious but feel they have a lot of catching up to do; and among them more than half (52%) say it’s because of unexpected expenses, 47% say it’s because of debt, and 37% say it’s due to a lack of effective planning for the long term. (see "Time Is Main Obstacle to Financial Planning").
The study included 1,546 Americans ages 25 or older who participated in an online survey between January 9 and 23, 2013. More information can be found here.