We Talk a Big Game But Don’t Follow Through When It Comes to Saving For Retirement

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Like the diet that always starts “tomorrow,” Americans like to say they’re going to get their finances in shape, but then fail to follow through on those good intentions. After the financial crisis gave a lot of us a harsh reality check about the inadequacy of our saving and investing plans, we promised to do better. We’re still saying the same things, and making the same excuses, today. 

Insurance company Northwestern Mutual surveyed more than 1,500 Americans earlier this year to find out about our saving and spending habits. About a third of respondents said a “slow and steady” approach to spending was the way to go, but around quarter of respondents said they have “a lot of catching up to do.”

A little over half said their approach was to “Save. Be careful and aim for long- term financial security, “ and almost four out of five said they were going to save as much or more this year than they did last year. Sounds good, right?

(MORE: Financial Independence? Today’s Young People Don’t Expect It Anytime Soon)

It would be good if we were actually following through on those ambitions. But at the beginning of 2009, when Northwestern Mutual conducted a similar survey of 1,000 people, the responses were about the same. About 70% said their savings would be higher or about the same over the next 12 months, and 41% said they’d spend less money.

Something’s not adding up. When asked this year, the number of people who said they’d spend less this coming year was about the same — 39% — but why haven’t we been more successful?

About half of survey respondents said “unexpected expenses” kept them from saving more. A slightly smaller number blamed their debts for keeping them from reaching their savings goals, while 37% (maybe a more honest minority) admitted they just hadn’t done a good job of planning their finances for the long term.

What’s worse is that 22% of respondents in the 2013 survey said they’ve stopped or cut their retirement contributions, and the same number had actually dipped into their retirement savings.

When we do manage to get our act together and put money away for retirement, we’re still too spooked by the market roller-coaster ride of the last five years to put as much money into stocks as we should be, a new survey says.

“Participants in 401(k) plans continue to take fewer risks with their retirement savings than they did before the 2008 financial crisis,” the Spectrem Group says in its new Retirement Market Insight Report.

At the end of last year, 401(k) participants had only 49% of their money in diversified equities or company stocks, with another 21% in money market funds. Before the economy went into free fall, that picture was very different: In 2006, 401(k) investors had 59% of their assets in equities and 16% in money market funds.

We’re not saving as much as we should, so when we do sock a little away, we’re too cautious with it. The upshot is that we fall even further behind on our investment goals, while the money we’re trying to hang onto isn’t even keeping up with inflation.

Experts say the formula to figure out how much of your portfolio should be in equities is to divide your age from 110. In other words, even if you’re 60 years old, that average from Spectrem’s study is too conservative (although experts also say the 13% of that total we’re investing in our own employers’ stock should be a little less than half that — remember Enron?)

Last fall, USA Today dubbed the current climate the “age of safety.” Safety sounds smart, but it’s not when you’re trying to build a nest egg.

Even the richest 1% of Americans are running scared from stocks: According to a 2012 survey, this demographic — people who can afford to lose a few bucks — funneled more than half of their money into low-return savings and money market accounts, up from a little less than a quarter five years earlier.

“Recent economic events continue to impact investor confidence and have heightened concerns about retirement security,” Spectrem says. Almost two-thirds of 55-to-64 year-old investors say they won’t have enough saved for a comfortable retirement, and 46% say they’re not putting away enough money now.

Addressing the second issue — not saving enough — would go a long way to alleviating that fear factor and our irrational impulse to squirrel away what we do save into the financial equivalent of under the mattress.

(MORE: Scared to Prepared: How the Great Recession Changed Our Spending Habits)

Some new data indicates that the tide may be starting to turn. New studies from Fidelity and Principal Financial both indicate that Americans are finally starting to buckle down and save more. Fidelity found that more than three-quarters of respondents said their new fiscal restraint was permanent.

This is good news if it holds, but a look back shows that we have a long history of being overly optimistic and telling ourselves about how we’re going to get our act together — sometime in the future. For people who are getting close to retirement, hopefully this new austerity is the real thing and can be maintained long-term. They’re running out of “tomorrows” to start that financial diet.