Getting ready for retirement can mean different financial strategies depending on the individual. Many people may be taking advantage of specific retirement plans such as a 401(k), which may put them in a better personal finance situation for the future.
Approximately 76 percent of Americans who have a 401(k) through their employer increased their contributions in 2013 compared to 2012, according to a report from Bank of America Merrill Lynch. This was 3 percent higher than the previous year's level. In the fourth quarter alone, more than 80 percent noted that they increased contributions.
"Thanks to advancements in the fields of medicine and technology, people today are preparing for a retirement that will likely be many years longer than any previous generation," said David Tyrie, head of retirement and personal wealth solutions for Bank of America Merrill Lynch.
Further financial education needed to improve retirement chances
Getting to a level where an individual can feel comfortable financially in retirement is important, but some may need to learn more about money before achieving this. According to a report from Genworth Financial, 60 percent of those polled felt that there is a relationship between being financially literate and ready for retirement.
However, there may be some gaps in actually reaching this point. The report noted that just 46 percent of Americans look to consume financial information to improve their knowledge of these topics. Of that group, a total of 45 percent felt that it was due to financial products being too complex. More than 35 percent explained that they don't have the time to look through these topics.
"It is not lack of access to information that is holding many Americans back from improving their understanding of financial matters," said Dr. Barbara Nusbaum, a New York-based psychologist and money coach. "Rather, it is a feeling of being overwhelmed – by the complexity of financial products, by the amount of time perceived as necessary to improve one's financial knowledge and a disconnect between financial needs and personal needs. An hour invested today in gaining the financial know-how that will make your life, family and money more secure will pay tremendous dividends over the long run."
Another issue is the general confusion among Americans about finances. The report added that approximately 18 percent were unsure about how to start learning about finances.