Poll: Many Overconfident About Finance Plans

March 2 -- Americans are unrealistically confident about the financial planning they have done for their future, the authors of a new survey warn.

While 79 percent of Americans say they are comfortable with the planning they've done, the truth is that many are dangerously unprepared, say the authors of the study, which was conducted by Harris Interactive for insurer Northwestern Mutual.

They note that fully one-third of respondents haven't started saving for their retirement, and that 23 percent don't save any of their monthly income for long-term goals.

At the same time, Americans expect to have longer retirements than ever before: an average of 22 years, according to the nationwide surveyof 1,279 adults between the ages of 21 and 69. It was conducted in November and December, and has a margin of error of 3 percentage points.

One problem is that it can be hard to bite the bullet and start saving. "People tend to postpone the pain," says economist Mark Schug of the University of Wisconsin-Milwaukee, noting that the benefits of saving are not felt until the distant future.

Schug, an adviser on the survey, also says people face "decision paralysis" when faced with multiple savings choices. A company 401(k), for instance, can have 15 or 20 options.

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Trigger Points

Often it takes a change in family or financial status to prod people into saving. Among the top reasons survey respondents gave for starting to save were having a child, getting married and getting a job with a 401(k).

Talking about money can help, too. The authors found that those who save a significant amount of their annual salary were much more likely to have had family discussions about financial matters.

In other findings in the Northwestern Mutual/Harris survey:

The median amount of savings Americans think they need to feel financially secure is $515,000. The median amount they would need to feel rich is $1.1 million.

Americans spend an average of 10 hours a month on money matters from bill-paying to financial planning.