The Tortoise Wins the Retirement Saving Race
Remember the Aesop’s fable about the tortoise and the hare, in which the slow but steady tortoise beats the faster but impetuous hare? A recent analysis argues Aesop was on to something regarding retirement planning, as well.
In “When it Comes to Retirement Saving, Consistency Pays
,” a piece appearing in BenefitsPro, Chris Carosa argues that the lesson from Aesop’s fable — that consistency and “slow but steady” wins the race — is often applicable in many situations in life, including saving for retirement.
Carosa cites a report by the Employee Benefit Research Institute (EBRI) that lends credence to this notion. EBRI found, Carosa says, that “While the amount being saved and appropriate long-term investing are obviously important, the data suggests plan sponsors and public policy wonks might want to emphasize consistency in saving as well.”
Carosa argues that the balances of plan participants who are consistent are likely to be larger than average. And “more importantly,” he writes, “consistent participation appears to be correlated with significant growth in retirement asset” and notes that EBRI found that more than twice as many consistent participants had balances of more than $200,000 than did all workers in the aggregate.
“Perhaps retirement plan policy should focus on keeping participants in the game because, as Aesop taught us, slow and steady wins the race,” concludes Carosa.