Three-quarters of Americans now place an emphasis on long-term planning as opposed to short-term performance with one-third admitting they subscribe to the philosophy behind the old adage: Slow and steady wins the race.
The finding, among others, was released as part of Northwestern Mutual’s “Planning and Progress Study.” As the name of the study denotes, it seeks to take the pulse of Americans’ attitudes toward money through the lens of goal-setting and priorities.
Whether it’s from people seeing part of their savings depleted during the economic crisis or the success of the plethora of public awareness campaigns stressing the importance of adequate retirement planning, Americans are saving more. At the same time, many have no concrete long-term retirement plan, and if they do, they have failed to correctly implement it.
However, Americans may not be practicing what they profess they believe. The study found that 23 percent of American would like to invest more conservatively but fail to do so because they feel they have catching up to do. Among that group, half say they need to catch up due to unexpected expenses while 47 percent say it is because of debt. Thirty-seven percent say it is because of an initial lack of adequate long-term planning.
The study also found that people ages 55 and older believe the best financial decisions they ever made include:
- 40 percent – Saving early;
- 40 percent - Paying off a mortgage;
- 29 percent - Buying real estate at a good price;
- 27 percent - Investing heavily in their 401(k);
- 22 percent - Making sure their family is protected.
People ages 25-54 believe the best decisions they will have to make in coming years will be:
- 53 percent - Starting to save early;
- 52 percent - Making sure my family is protected;
- 25 percent - Relying heavily on my 401(k);
- 20 percent - Buying real estate at a good price.
“Interestingly, there’s consistency across generations with Americans valuing the importance of saving, paying off debt and managing risk. 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,” said Greg Oberland, Northwestern Mutual vice president.