Statistics and Real People

 In Expectations, Financial Planning, Forecasts, Future, Goals, Happiness, Health Care Costs, Inspiration, Motivation, Past, Retirees, Retirement, Risk, Social Security

If you pay attention to any media at all, it is hard to get through the day without hearing of a new survey or statistic about our collective health, eating habits, retirement preparations, school performance, crime rates, and anything else that can be measured.  “We” are either doing great, improving, or on the edge of a calamity!  What do you think of when you hear these type of reports?  Isn’t your instinctive reaction to think about whether or not the results apply to you.  Don’t you say to yourself something like, “Well, that’s not me” or “That kind of fits my situation.” Of course!

By and large, many of us are concerned about ourselves.  This is not unusual at all and doesn’t mean you are selfish.  This is not to say, though, that we should not have some concern over how the local, national and international communities that we live and move in are doing.  But aren’t we primarily concerned about how these factoids apply to us?

In my experience, many of these statistics are far too simplistic.  They are general, as you would expect.  The results provide little context – they may not be meaningful in how they impact real flesh and blood people.  You see, the thing about real people is that we make decisions to adjust our life to the changing world around us and to the specific developments that directly affect us.

When it comes to the state of retirement planning in America, it seems as if there is a survey a day discussing the upcoming retirement catastrophe in America.  The reports are that some/many/most Americans have no savings, don’t understand financial matters at all, have too much debt, etc…  There are a litany of problems that apparently will have much of society living out their retirement years in despair.

Is this really what will happen?  I am hardly convinced.  Many of these statistics are drawn from surveys in which many of the questions are simply too broad.  For example, these surveys will ask people if they believe they will have enough for retirement or how much planning they have done for their future.  In many cases, people simply don’t know if they are on track so they assume the worst.  But just because they have not been planning does not mean they are necessarily in trouble.  Over the years, I have done many retirement plans for people and many of my clients were surprised that they were in far better shape than they anticipated because their expenses were low and under control.

Is it heresy to ask if every single American really needs to do a plan for their future?  Seriously!  Keep in mind this is what I do for a living.  I enjoy helping people plan for their future, and feel grateful that it provides me a gratifying career.  I think everyone would be better off if they planned for their financial future and made informed decisions along the way. But not everyone gets around to it.  They just don’t!  Sure, they might make mistakes and it might cost them a bit, but it doesn’t mean, necessarily, that they are going to end up on skid row if they don’t do a financial plan.  Some will muddle through and end up okay.  It may not be the best way to get there, but sometimes that is how life unfolds.

When it comes to the financial future of many Americans, I have concerns that many will not end up with the kind of retirement they want.  However, I think we are far from a retirement catastrophe.  (I am actually more concerned about recent college grads, heavy tuition loan amounts, and their bleak prospects for significant and meaningful career opportunities). Many middle aged Americans are able to get their expenses under control and adapt to their situation by modifying their plans and considering work in their future.

Keep in mind that you are, well, you.  You are not an average or a statistic so be careful about how much to read into reports.  Survey stats might be interesting in the aggregate, but they often times are misleading and not necessarily useful to individuals.  Try to avoid the noise and get a handle on your situation – it’s the one that matters most!

What do you think? How do you respond to the daily onslaught of new “surveys”?

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