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8 reasons investors don’t plan for retirement

Reprinted courtesy of

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One of the most fundamental forces that separate investors from success is that they don’t plan ahead.

Ironically, it’s not the plan itself that does the trick. No, it’s the act of planning, the attitude behind the commitment to plan. The person who avoids planning is likely to avoid other inconvenient (and yet crucial) steps in the investing process.

As General Dwight Eisenhower once said: “In preparing for battle I have always found that plans are useless but planning is indispensable.”

Americans spend countless hours (and often dollars) planning weddings. So why can’t they be bothered to plan their financial futures?

Among an infinite number of possible reasons, here are eight common ones:

One: They put it off

Procrastination might be the No. 1 reason people don’t plan. We all know there are some things we “should” do, and we know of course that we will do them — when the time is right. Of course, the stars never line up perfectly for something we really don’t want to do in the first place.

When it comes to planning, procrastination is certainly ironic: Every day that we delay is one day we’ll never benefit from whatever plan we will eventually make.

Two: They don’t know where to start

Often it makes the most sense to start at the beginning — you know, that legendary “first step” that’s the most difficult one in the 1,000-mile journey.

But when it comes to financial planning (and actually any kind of planning), sometimes the best place to start is at the end. This means thinking about what you want to accomplish. A vivid mental picture of the success you desire can be a great motivator.

Three: Seeming futility

They think the task (or the goal) is hopeless, and they don’t want to face up to what they believe is grim reality. All of us have to confront some form of this issue. Weight? Diet? Relationship challenge? Toxic boss? Yes, we’ve all been there.

“Hopeless” is never a fact; instead, it’s an internal mental conversation, a way that you interpret the facts. Here’s another bit of irony: If you aren’t willing to face up to what you may regard as “the grim reality” of your situation, you’ll never discover the “real” reality of it. And your imagined reality may become a self-fulfilling prophecy.

Four: The joys of instant gratification

They are distracted by a zillion other things that promise instant gratification instead of an uncertain payoff at some uncertain future date. In today’s world, it’s pretty hard to argue with this.

Are you looking forward to trying to convince your spouse that spending the next hour planning your retirement and making a budget is a more compelling than an hour of surfing the web, watching TV or chatting with friends? No, I didn’t think so.

Instant gratification is always nice. But it’s a well-documented fact that the people who are most successful in life are those who can defer their rewards to pursue a larger payoff in the future. It’s your choice, and I hope you’ll make it.

Five: Overwhelmed

They see the entire task as overwhelming, so they don’t break the problem into parts that are easier to manage. If weddings and vacations had to be entirely planned in one sitting, most people would stay single and stay at home.

One solution to this should be obvious: Start somewhere. If you’re thinking of a vacation, first figure out either where you’re going or when you’re going, then start filling in the details.

Another obvious solution: Get some help. Hire a wedding planner (if you have the budget) or a travel agent or a financial planner. These people know how to get you going and how to keep you on track.

Six: They think it’s too late

If you look at life this way, you could easily convince yourself that it’s always too late. There is always something you could have done one hour ago, or yesterday, or last year, that might have made your life better right now.

“Too late” is sometimes actually true. That thing you said that you wish you could take back. That thing you didn’t say when you had the opportunity. That airplane flight that took off even though you weren’t there yet (The nerve!).

The irony is that, if you have any future, then right now will soon become that “one hour ago;” today will soon become that “yesterday,” this year will soon become that “last year.”

This very moment might be exactly the time to do whatever is up for you.

Seven: Refusal to cut back

They are pretty sure a realistic plan will require them to cut back on a lifestyle they are enjoying, a lifestyle they think they deserve. If this actually turns out to be the case — and you can’t know this until you do the work — then this one loops back to my point above regarding instant gratification.

Eight: On a wing and a prayer

They think they don’t need a plan; they’re sure they can successfully wing it as they go along. For many people, this may be the biggest reason they don’t plan.

And in another bit of irony, many people actually do get by pretty well without a plan. But if you want to put the odds in your favor, winging it just won’t do.

Winging it is no way to run a professional football team, no way to fly a plane, no way to run a successful business.

And in my opinion, it’s no way to run your life.

You have the last word on how to run your life. The last word in this column goes to time management guru Alan Lakein: “Planning is bringing the future into the present so you can do something about it now.”

Richard Buck contributed to this article.