Some of us are predisposed to plan.  We plan meals, school schedules, weekend social activities, workouts, and vacations, to name just a few examples.  Others are more spontaneous, taking life as it comes and reveling in the unknown.  We can deal with an unpleasant meal, obligatory weekend activity, or ruined vacation in short order. Another one will come along shortly.

Your financial life is a different animal altogether.  If we trip up the first time, things may not fall apart, but the challenge becomes stiffer to get our financial selves back on track.  We don’t get a second chance to prepare for retirement. There is no ‘do-over’.

The act of creating and following a financial plan is powerful leverage. We recently came across a retirement study that examined the role that planning can play in affecting retirement savings decisions.  The researchers grouped the analyzed subjects into the four categories below.  The amounts that follow represent the median net worth for each group.  Successful planners accumulated nearly three times the amount of wealth than non-planners.  Moreover, the degree of planning also matters:  Those who can develop and stick with a plan accumulate more wealth than simple planners.

Non- planners – those who had no plan ($338,418)

Simple planners – those who attempted to do a retirement saving calculation ($742,843)

Serious planners – those that had a plan for how to save money ($910,382)

Successful planners – those that created a plan and stuck to it ($1,002,975)

It should not be surprising that having a plan, and sticking to it, generates the best outcome.  But we were surprised at the news that planning can result in 2-3 times more wealth.  Even just calculating the amount of money you need can have a material impact.  At its core, a plan allows you to focus on the things you can control with predetermined courses of action to build discipline.

Most of us would wish to be successful planners, but the study reveals that planning for retirement is difficult, few do it and fewer still think they get it right. But for those who try, the payoff is worth it.