Tag Archives: Employee Benefit Research Institute

The Money Scorecard: How Do You Rate?

By Next Avenue

Ed Koch in New York 1980's

Filed under: ,

By RICHARD EISENBERG

When Ed Koch was mayor of New York City, he loved to ask passers-by: “How’m I doing?!” We all want to know the answer to that question in our lives, too.

That’s why Next Avenue is launching the series: “Next Avenue Scorecard: How Do You Rate?” We’re starting with my area: Money.

Below you’ll find the latest statistics for how Americans in their 40s, 50s and 60s are faring, on average, based on: net worth, income, savings and investments, and debt — along with my two cents after each.

The good news I can report: According to a spanking new Fidelity Investments survey on retirement savings, individuals in their 40s, 50s and 60s are saving more for retirement these days than other age groups.

“We’re seeing many midcareer investors taking advantage of catch-up contributions [extra money people 50 and older are allowed to put into retirement plans], which is encouraging because this can have a significant impact on reaching savings goals,” says Ken Hevert, vice president of retirement products for Fidelity Investments.

On to the Next Avenue Money Scorecard:

NET WORTH

Median family net worth
Age 45 to 54: $117,900
Age 55 to 64: $179,400
Age 65 to 74: $206,700

(Source: Federal Reserve Survey of Consumer Finances, 2012)

My two cents I think net worth — what you get when you subtract your household’s debt from its assets — is a somewhat meaningless number, since yours could look puny if you have a sizable mortgage, despite your savings. You can compare your net worth versus others with your income using the CNNMoney.com Net Worth: How Do You Stack Up? calculator.

INCOME

Median household income
Age 45 to 54: $63,861
Age 55 to 64: $55,937
Age 65 and older: $33,118

(Source: U.S. Census Bureau Current Population Survey, 2011)

My two cents As you can see, household income generally shrinks once you hit your mid 50s and plummets after 65 (many in that age group are retired). A clever calculator on the Payscale.com site lets you see how your salary compares with others in your field with your experience; you can also get a free customized salary report with career path predictions for your job and names of companies who hire people like you.

SAVINGS AND INVESTMENTS

Total savings/investments, workers age 45 to 54
Less than $10,000: 46%
$10,000 to $99,999: 26%
$100,000 to $249,999: 12%
$250,00 or more: 17%

Total savings/investments, workers age 55 +
Less than $10,000: 31%
$10,000 to $99,999: 29%
$100,000 to $249,999: 18%
$250,000 or more: 22%

Percentage of workers currently saving for retirement
Age 45 to 54: 57%
Age 55+: 66%

(Source: 2012 Retirement Confidence Survey, Employee Benefit Research Institute and Mathew Greenwald & Associates)

Percentage of families owning retirement accounts
Age 45 to 54: 60%
Age 55 to 64: …read more
Source: FULL ARTICLE at DailyFinance

Wealthy Workers Are Seriously Underestimating Their Retirement Needs

By Business Insider

Wealthy Workers underestimate

Filed under: , ,

(Alamy)

By MANDI WOODRUFF

A lot of wealthy workers could be missing a vital flaw in their plans for retirement, a new survey shows.

More than 80 percent of workers earning $115,000 say they are prepared for retirement — but they think they’ll only need $66,000 per year to live on, Charles Schwab (SCHW) found.

Sure, it’s possible to survive on $66,000 a year — plenty of people would be glad to earn half that much in a year — but chances are high-earners won’t be prepared for that kind of lifestyle change, let alone unexpected costs that could come up down the road.

Most experts agree consumers should plan on at least saving enough of a nest egg to maintain their current lifestyle in retirement. Otherwise, the only answer is to find ways to minimize costs and trim household budgets.

That starts with figuring out what age you plan to retire, and these days, workers are planning on working well past the typical 65th-birthday benchmark.

Couple that with the fact that we’re living longer than ever as well, and retirees could wind up spending 15 to 20 years living off just their nest egg alone.

The biggest hurdle retirees will almost certainly face is the rising cost of health care.

Sponsored Linksadsonar_placementId=1505951;adsonar_pid=1990767;adsonar_ps=-1;adsonar_zw=242;adsonar_zh=252;adsonar_jv=’ads.tw.adsonar.com’;

“Even with Medicare benefits, a 65-year-old couple could need nearly $400,000 to cover out-of-pocket health care costs during retirement, according to research by the Employee Benefit Research Institute,” noted Carrie Schwab-Pomerantz, Charles Schwab senior vice president. “The bottom line for everyone is that health care costs need to be carefully factored into retirement plans.”

No one can predict whether they’ll need long-term medical care in the future, but there are steps people should take now to mitigate those issues as early as possible.

First, review your retirement goals with your spouse or partner and think about running it over with a financial advisor. Fee-only financial planners have a fiduciary duty to work in the best interest of clients, and you won’t have to worry about commissions or other hidden fees that could sneak up on you.

Just half of Americans said they’re saving through a retirement plan like a 401(k) or IRA, according to a recent survey by the EBRI. While not everyone might be able to max out a retirement plan contribution each year, even contributing a small portion of each paycheck to a retirement account could be a big difference in the long run.

“Especially for those looking to catch up on savings, we recommend maximizing contributions in a 401(k) at least up to the employer match, considering other tax-advantaged retirement accounts such as an IRA, and finding ways to automate savings,” Schwab-Pomerantz says.

Permalink | <a target=_blank href="http://www.dailyfinance.com/forward/20497312/" title="Send …read more
Source: FULL ARTICLE at DailyFinance

Market rebounds, but retirement confidence doesn't

Workers appear to have little faith that the economic recovery and the stock market‘s climb have left them better-prepared for retirement.

Confidence in the ability to afford a comfortable retirement remains at the same record low level recorded in 2011, and is slightly lower than last year, according to the Employee Benefit Research Institute, which has conducted the study the past 23 years.

Nearly half of workers surveyed in January had little or no confidence that they’ll have a financially comfortable retirement, EBRI said Tuesday. Twenty-eight percent were not at all confident — the highest level recorded since the survey began in 1991 — with 21 percent saying they were not too confident.

About 13 percent were very confident and 38 percent somewhat confident, figures that weren’t substantially greater than the record lows in the 2011 survey.

If there’s any positive takeaway, it’s that researchers believe workers who are the least prepared for retirement have become increasingly aware that they need to save more.

In 2007, for example, confidence numbers were substantially higher before the economy sank into a recession. Seventy percent were either somewhat confident or very confident that year.

The decline in confidence in recent years suggests “a much higher degree of realism” about the need to increase savings rates, said Jack VanDerhei, EBRI‘s research director, and co-author of the report.

That could explain why confidence remains low, despite the economy’s gains since the recession and a market rally that lifted the Dow Jones industrial average to a record high two weeks ago.

Despite the realization that they’re not saving enough, short-term financial needs are so pressing that long-term goals become secondary.

“Job security and financial security continue to be Americans’ major concerns, not retirement,” VanDerhei said.

In addition to worrying about their retirement savings, workers “lack confidence in their ability to pay for medical expenses, and even basics such as food, clothing and shelter,” he said.

The survey was co-sponsored by EBRI, a private nonprofit research organization, and Matthew Greenwald & Associates, a market research firm. Two-dozen public and private organizations, including financial services companies, provided funding. About 1,000 U.S. workers …read more
Source: FULL ARTICLE at Fox US News

57% of US Workers Have Less Than $25K in Savings

By John Johnson The Wall Street Journal points to a double-whammy in terms of retirement savings: People aren’t saving enough, and they’re living longer. Among the depressing nuggets from a new survey by the Employee Benefit Research Institute: 28% of Americans don’t think they’ll be able to retire comfortably, the highest percentage since… …read more
Source: FULL ARTICLE at Newser – Home