Fifty years ago, Neil Armstrong radioed Mission Control with the phrase that made history: “the Eagle has landed.” Apollo 11, which put the first two humans on the moon, was not only the culmination of years of toil, trial and error; it also ushered in a new era of space exploration that over the next half century would yield ever-richer data, more innovative engineering and literally awesome successes – from the Space Station to the Hubble telescope to New Horizons’ flyby of Ultima Thule.
The NASA scientists in Apollo’s early days could not have imagined where their work would eventually lead, but they possessed a skill that’s critical for anyone making a plan: the ability to make their futures part of their present. That mindset is just as useful for those saving for retirements that are decades away. Yet, abundant research shows that people often struggle to visualize their older selves, making it difficult for them to get started on the investment path.
The evidence is borne out by BlackRock’s latest Global Investor Pulse, our annual survey on investor behavior around retirement. We found that just 56% of Americans have started to save for retirement. And they don’t feel great about it: 53% believe they are lagging behind financially and 45% think it’s unlikely they’ll achieve their ideal retirements.
That’s troubling news, for reasons that are familiar to most of us by now: longer life expectancies, shrinking safety nets and the demise of traditional pension plans all call for saving more and investing smarter to create the retirement you want.
Clearing the hurdles
If you’re finding it a challenge to bring your planning forward, here are a few truths to consider.
1. Taking action can be its own reward.
The Pulse survey found that for most (56%) people, money is far and away the biggest source of stress, outstripping by a large margin work, health and family. So it stands to reason that being proactive about saving and investing is not just good financial sense; it can also foster a measure of serenity. We found that respondents who have a retirement plan are actually more likely (78%) to experience a higher degree of overall well-being today than those without a plan (52%).
2. You are not the problem.
We humans are motivated (or demotivated) for a variety of individual, complex reasons — emotional, rational or otherwise. And as the survey made clear, factors such as current financial worries (47%), too many investment choices (76%) and a jargon-loving industry that makes investing hard to understand (64%) can all throw up barriers to investing. So it’s not just you, shirking your responsibility. As Nobel laureate Richard Thaler once remarked, “People aren’t stupid. The world is hard.” Which brings us to the third consideration.
3. Easier is better.
Six out of 10 Pulse respondents don’t think they have enough money to invest. But the math of compounding is real, and there are a multitude of convenient, cost-efficient ways to get engaged with the markets. These can include participating in your employer’s corporate match program, deploying tech-enabled savings tools and seeking professional advice. The latter in particular appears to provide peace of mind: more than 80% of those who use a financial advisor report a higher sense of well-being. (It’s also worth noting the 50% of advisor portfolios are retirement assets.)
In other words, seeking guidance, whether technological or human, may be the thing that gets you started, and keeps you excited about the future ahead of you.
Neil Armstrong certainly recognized the power of teamwork. When he finally set foot on the moon, on July 21, 1969, he uttered the most famous line in space travel. His pronouncement can also count as astute advice that retirement investors should take to heart. Small steps today can lead to giant leaps toward the future.