How you can prepare for retirement

"By failing to prepare, you are preparing to fail,” Benjamin Franklin said. How can you prepare for retirement?

From a new working paper by Martin & Finke:

Most Americans have not estimated how much they need to save for retirement. This lack of awareness may contribute to low levels of retirement savings. We investigate the relation between planning and retirement wealth. Those who have estimated how much they need to save for retirement have significantly higher retirement wealth. Respondents who rely on an advisor to help plan for retirement save more than those who do it themselves and are more likely to own tax advantaged accounts. Advising services that did not involve estimation of retirement needs had no measurable value. Results suggest that planning, particularly with the help of a comprehensive advisor, improves retirement outcomes. 

A graph from the paper:

HHs stands for Health and Human Services. 

It is interesting for me that this kind of findings are also very useful for many people living in developing countries. In fact, advice or policy-recommendations in different areas such as on how to reactivate the US economy apply more and more to developing economies nowadays.  

“I’ve got a sizeable retirement nest egg. It’s an ostrich egg, and it’s going to make an omelet so big that it’ll produce enough leftovers for decades.
” 

― Jarod Kintz, The Days of Yay are Here! Wake Me Up When They're Over.