Undertaking even a little planning is associated with sizable wealth holdings

From Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth by Annamaria Lusardi and Olivia S. Mitchell. Some interesting data. A handful of key take-aways:

28% of the population have done no planning for retirement.

Of the 72% that have done any planning whatsoever, they arrive at retirement age with twice the wealth of non-planners. And remember this is only focusing on people who say they plan at least a little for retirement - it says nothing about how they translate planning into actions, a notoriously big gulf.

College graduates have more than twice the savings of high school graduates and more than 3.5 times the savings of high school dropouts.

Perhaps most striking was the fact that married couples have more than three times the wealth accumulation as non-marrieds (separated, never married, divorced, widowed, etc.)

I find the last item intriguing. I wonder how much of that large factor (3X) is attributable to the simple effect of heterogeneity- i.e. when you have two individuals, you are statistically more likely to have complimentary skills and behaviors. If one is disinclined to plan and the other is inclined to plan, by having a married unit, you have a greater probability of at least some planning occurring (with the beneficial consequences) than is likely in a single person household where, if there is a disinclination to plan, it is unlikely to occur at all.

Also clear in Table 4 is the bimodal relationship between effort devoted to planning and household net worth. That is, those who report they undertook any planning – even “a little” – are much better off than those who said they planned “hardly at all.” In other words, undertaking even a little planning is associated with sizable wealth holdings, while non-planners display less wealth. The same pattern is present among the 1992 cohort. In other words, regardless of changes in home and stock prices, failure to plan for retirement for both cohorts is tantamount to having very little retirement savings. To highlight that planners hold substantially more wealth, we group households into two types: planners (those who have thought a lot, some, or a little about retirement) and nonplanners (those who have thought hardly at all about retirement). At the median, planners hold double the amount of wealth of non-planners

Behind all the data and technical discussion, it boils down to some very traditional advice. If you want a comfortable and secure life and retirement via wealth accumulation, 1) Work (10x multiplier lowest to highest), 2) Get educated (7.5x), 3) Get married (3.5x), and 4) Plan ahead (2.5x).

Regardless of race, gender, income level, etc., if you make these four decisions, you will be in pretty good shape. I.e. decisions and behaviors outweigh snapshot factors such as race, gender, etc.