It’s no secret that one of the leading mental health issues in America is anxiety. We’re known for our hard working attitude and long hours in the office, both of which naturally raise stress levels. Add worrying about who will be the next president to the mix, and it’s no wonder Americans’ stress is through the roof! A recent survey conducted by Personal Capital showed that this election season, the biggest worries plaguing Americans today include the threat of terrorism, the economy, and healthcare.
But as is so often the case, worrying doesn’t always translate into actionable change when it comes to the areas of our lives where we could use some work. In short, we spend a lot of time stressing about issues we have little control over, and not enough time trying to fix what we can change. This is especially true when it comes to retirement; by and large, statistics prove we aren’t saving – or worrying – nearly enough.
What Americans Worry About
Here’s an example:
In addition to the above leading concerns (threat of terrorism, the economy, and healthcare is 48%, 33%,and 31% respectively), other issues keeping Americans up at night include crime, immigration, unemployment, education, and morality (24%, 23%, 21%, 20%, and 15% respectively).
Yet only 8% of people cited personal finances or retirement savings as concerns – surprising since the economy ranks high on the list and Americans aren’t even close to being on track for retirement.
For those who have at least started saving for retirement, our research shows that slightly more Americans are worried about retirement if Hillary Clinton becomes president. Of course, it all depends on which side of the political spectrum these Americans fall on. For example, Republicans and conservatives tend to fear a Democratic candidate when it comes to retirement, while Democrats and liberals fear the opposite. When asked, 64% of Republicans worried more about a Clinton win, while 59% of Democrats worried more about a Trump presidency when it came to their retirement accounts.
Americans are worried about a lot this election season – especially the economy. But too many people are so caught up in the dramatic debates and Twitter wars that they fail to realize their retirement is closely tied to the economy, and it’s something they have power over! The stock market goes up and down every day regardless of who sits in the Oval Office. With a few small moves and a few smart decisions, putting your attention on what you can do – optimizing your retirement now – instead of worrying about which candidate could maybe sway the natural dips and rises in the stock market will make a giant impact on the comfort and happiness of your personal life. Guaranteed.
What Americans Should Worry About
Here’s the thing – outside of voting, there is little the average American can do about the economy, the stock market, or which candidate pulls out a win this November.
We can and should worry about those things, but should they be our biggest worries? Nope.
In addition to caring about broad political issues that affect our quality of life, it’s just as important to care about improvements we can make in our daily lives – things like our health and personal finances.
Since our main issue here is financial planning, we’ll focus on the latter. Budgeting and researching investing strategies may not be as fun as following the candidates’ every jab at each other, but it’s necessary if you want to get ahead. Here’s why:
• According to the Economic Policy Institute, most families aren’t even close to reaching their retirement goals. In fact, the median retirement accounts for all age groups range from “$480 for families in their mid-30s to $17,000 for families approaching retirement in 2013.”
• Half of families have no retirement savings at all.
• The average U.S. household had $15,310 in debt in 2015, according to Nerdwallet.
• Average student loan debt surged over $37,000 this year.
• Almost half of American families can’t cover a $400 emergency.
Regardless of how smooth your own retirement is looking, these statistics are downright shocking. Remember though, being in debt and not having any cash is the norm these days.
Ignore Politics, Do This Instead
If only we would divert our attention to the one area where we’re the boss – our personal finances. Fortunately, all it takes is a few weekly money moves to grow wealthier, become more independent, and drastically change the outcome of our lives.
Want to get ahead regardless of what happens? Here are five money moves that will start improving your life today, regardless of who wins the Presidential election:
#1: Track your spending.
No matter how frugal you think you are, it’s easy to overspend when you don’t keep track. A dollar here, ten bucks there, and a date night later and, all of a sudden, you’ve blown $100 bucks or more. Unfortunately, unfortunate spending episodes tend to add up in a hurry.
To find out how your spending looks and how you might improve, you need to track it in real-time. Signing up for a free account with Personal Capital can help in that respect since our budgeting software tracks and categorizes your purchases with no effort on your part. Once you start tracking, you can watch out for budget holes draining your wealth.
#2: Start using a budget.
Learning to budget is a smart move for anyone tracking their spending for the first time. By creating a budget each month, you control your money instead of letting it disappear into thin air.
To get started, sit down and create a list of your fixed and fluctuating expenses at the beginning of the month. Once you have your expenses down on paper, compare the total against your income to see how much you might save. Then try diligently to stick to your spending plan. It’s not always easy at first, but it gets easier over time.
#3: Add more money to your retirement accounts.
Want a foolproof retirement? Boost your retirement account contributions by a percentage or a lump sum. If you’re employed by someone else and have a 401k plan, the easiest strategy is increasing the percentage you contribute every month. If you’re self-employed, on the other hand, you can deposit either lump sums or a larger percentage of your income over time.
Remember, compound interest is on your side. Plus, there may be notable tax advantages for contributing more money to a tax-deferred retirement account like a 401k. Most importantly, however, is the fact that this money will be there when you need it.
#4: See if you’re paying too many fees on your retirement accounts.
Already investing heavily for retirement? That’s a good thing. Unfortunately, not enough people know how their retirement account fees stack up – or how they compare against the average. Remember, you could be losing hundreds of thousands of dollars in hidden fees in your mutual fund, investing and retirement accounts!
Fortunately, Personal Capital’s free retirement Fee Analyzer can do the heavy lifting for you. Simply create a new account and enter all of your retirement account information to find out how much you’re paying in fees, and how those fees will add up over a lifetime. If you’re paying too much, you can also find out how to roll accounts over to lower your ongoing costs.
#5: Watch your net worth change.
When it comes to building wealth, net worth matters more than almost anything else. Net worth includes your assets minus your liabilities, and offers the greatest measure of your financial progress over time.
Once you open an account with Personal Capital, you’ll see how all of your assets and liabilities compare and your full net worth updated on a daily basis. The stock market will go up and down over time, but your net worth should gradually increase regardless as you invest more and pay off debt.
The Bottom Line
If you really want to get ahead in life, it’s time to take an introspective look at where you stand. Ignore politics and the economy for a minute and ask yourself, “Am I doing the best I can?”
If the answer is “no,” you should work on remedying that situation right away – you know, before you worry about the implosion of Obamacare.
While it’s great to delve into the political landscape and pay attention as the world is changing, coming up with a long-term financial plan will leave you better off regardless of who sits in the Oval Office. The bottom line: getting involved in politics and caring about your country is smart; placing your retirement in the hands of a political candidate may not be.
With enough smart money moves under your belt, you’ll come out a winner no matter what.
Do you worry too much about things you can’t control? Will you have enough to retire one day? Tell us in the comments below!
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.