|
|
And 3 things you should do about it
9 Findings from the Retirement Planning Survey
by Gary Foreman
Related Articles |
|
Will Mega-Millions Fund Your Retirement?
Will Boomers Have Enough to Retire? Fine with a Small Salary? |
The Employee Benefit Research Institute recently came out with their 2012 Retirement Confidence Survey. There are a number of interesting findings, especially for baby boomers and those thinking of retirement.
For instance, current workers confidence in their ability to pay for basic expenses in retirement has dropped dramatically since 2007. At that time, 40 percent were very confident. Today only 26 percent are that sure.
Or consider workers confidence that they're doing a good job of preparing for retirement. In 2006, only 12 percent said "not at all." By 2012, that number had grown to 19 percent.
Workers also are expecting to work longer. Twenty years ago, fully 50 percent planned to retire before age 65. Today less than 1 in 4 expect to retire that young.
At the same time, half of those who are retiring report that it's happening sooner than they had planned. Fifty percent say it's due to health issues and another 21 percent site the loss of their jobs.
There's also a big difference between workers and current retirees in their dependence on Social Security. Fully 69 percent of existing retirees say SS is a major source of their income. Only 31 percent of today's workers expect SS to play the same role for them.
The recession also appears to be affecting the number of workers who have money saved for retirement. Back in 2009, 75 percent said they had savings. Today that number has dropped 66 percent. The drop was especially steep with household income under $35,000 at only 35 percent. The assumption would be that they consumed money saved for retirement for current expenses.
Age makes a difference in retirement savings, too. Workers between the ages of 35 and 54 are just as likely to be saving money as their counterparts 10 years ago. But among younger workers aged 25 to 34 the number saving for retirement has dropped from 70 percent to 55 percent. It was not cited in the study, but rising student loans could be a reason.
The amount saved could fall far short of what they'll need in retirement. Fully 60 percent report that they and their spouses have saved less than $25,000 for retirement (excluding their home and defined benefit pension plans). About half of them have saved less than $1,000!
Finally, less than half of the workers surveyed have done a calculation on how much money they'll need at retirement. Not surprisingly those who have done a calculation are more likely to have a higher target for savings.
So what can you do with this information? If you're among the 50+ percent that haven't calculated what you'll need for retirement, do it. The National Association of Personal Financial Advisors can point you to a fee only planner who can help with the calculation. Or you can use one of the many online calculators. A popular one is on the AARP site.
Next, create a savings plan that will get you to your retirement savings goal. Again, you'll want to use a fee only planner or online calculator to know how much you'll need to save each year.
Then make retirement savings part of your regular budget. It's not an afterthought. Something that you'll do only if you have money left over. Cut other expenses or seek another source of income if necessary.
Saving for retirement is not an option. According to the Social Security trustees, there are currently 2.7 people working for each person collecting benefits. And that ratio is gradually going down. So unless you're already up in years or plan on living in poverty, it's important to have and execute a retirement savings plan that's not totally dependent on Social Security.
|
Gary Foreman is a former financial planner and purchasing manager who currently edits The Dollar Stretcher.com website and newsletters. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report and he's a regular contributor to US News Money and CreditCards.com. You can follow Gary on Twitter or visit Gary Foreman on Google+. |
Share your thoughts about this article with the editor: Click Here
Subscribe to TDS Newsletters
Join over 250,000 other subscribers!
To subscribe, check the newsletters you wish to receive, enter your email address and then click Subscribe.
View the TDS privacy policy.
|
Money problems? Struggling with credit card debt? What you need to know about bankruptcy? Trouble repaying student loans?
|
Get free money-saving articles in your inbox!
Sign up for our free weekly eNewsletter Surviving Tough Times.
Looking for an answer to a frugal living question? Click here to ask a
Dollar Stretcher Stretchpert!
Copyright 1996 - 2013 "The Dollar Stretcher, Inc." All rights reserved unless specifically noted.
Contact the Dollar Stretcher at:
Dollar Stretcher
PO Box 14160
Bradenton FL 34280
941-761-7805
"The Dollar Stretcher, Inc." does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation.
| About Us | Privacy Policy | Writer's Guidelines | Sponsorship | Media | Contact Us |