Adequate Retirement Funds
A new Pentegra Retirement Services survey conducted in September 2012, reveals that nearly one-third (32 percent) of U.S. adults who would like to retire do not know if they will be able to retire or do not believe they will ever be able to retire. Only 19 percent — about one in five adults — said that they will be able to retire at age 65.
In addition, the survey shows that young adults have an "unrealistic perception of how much money they need to retire," according to Rich Rausser, senior vice president of Client Services at Pentegra. Adults ages 35 to 54 are more likely than those ages 18 to 34 to say they will need more than $1 million to retire. Those ages 18 to 34 are more likely than those ages 35 to 54 to think that they will need only up to $500,000 to retire. Rausser says, "Younger adults new in the job market are likely making a lower salary and basing their retirement thinking on where they are now in their life, but they need to realize that their cost of living and expenses later on will be significantly different."
The survey also shows that the majority of U.S. adults (92 percent) feel that some of the average person's paycheck needs to go towards retirement planning. On average, they believe that 14 percent should be contributed from each paycheck towards retirement.
Other survey highlights include:
• 21 percent of adults with children under age 18 present in their households admit they have not planned for retirement, whereas only 12 percent of adults with no children present admit they have not planned for retirement.
• 28 percent of adults who have planned for retirement were helped in their preparation by their parents.
• 33 percent of those who have planned for retirement say that they were helped by a professional financial advisor.
• Over one quarter of adults (28 percent) who have planned for their retirement say that NO ONE helped them prepare for this.
• 31 percent of those who are currently retired say that NO ONE helped them plan for it.
• Women are more likely to be unsure about their anticipated retirement age than men.
• On average, adults ages 18 to 34 believe they will be able to retire at age 62; adults ages 35 to 54 estimate retirement at age 65; and those over 55, estimate retirement at age 67.
• Over three quarters of adults planning to retire feel they need up to $1 million to retire.
• While 22 percent believe they will need more than $1 million to retire, men are more likely than women to feel this way.
SESCO Management Consultants is available to assist with your human resource issues. You may contact us by phone at 423-764-4127 or by email at sesco@sescomgt.com.