Slow and Steady Wins the Savings Race

The Certified Financial Planner (CFP) Board of Standards surveyed American savers and found that those who have taken a slow and steady approach to saving throughout their lifetime are in the best position when it comes to retirement. The CFP Board identifies this 22% of the people it surveyed as “Confident Savers.” They have a median income range between $50,000 and $100,000, have fewer children living at home, participate in their employer’s retirement plan and expect Social Security will be an important source of income in their retirement years. They are also twice as likely as other groups to meet with a financial planner.

Confident Savers make saving money their No. 1 financial goal, with 60% saying it is extremely important to save. Eighty-eight percent of them save each and every month. On average, they began saving at age 25, and they value outside financial expertise.

“These four basic qualities can help anyone reach financial security,” says Eleanor Blayney, CFP Board consumer advocate. “Confident Savers are the tortoises—not the hares—in life’s financial contest. They don’t have to push and sweat as retirement comes near. They can take it easy in those final laps.”

The survey also found that 75% of Confident Savers say they understand how best to save money, 65% think they are saving enough to provide themselves a confident retirement, and 45% think credit card debt is one of the most important types of debt to pay off. Conversely, only 16% are somewhat concerned about their ability to save, and only 12% say they are behind in meeting their retirement goals.

Outside of these Confident Savers, the survey found that 48% don’t have enough money to save after paying their monthly bills. Thirty-five percent report that their household income has decreased significantly. Just over one-third, 34%, say that debt prevents them from saving. Thirty percent has experienced a major medical expenditure. The CFP Board identified the other groups as Concerned Strivers (27%), Stretched Worriers (26%) and Tentative Savers (24%). Before year-end, the CFP Board will release more detailed findings on these other three groups.

The CFP Board surveyed 1,000 people online in May.