According to the most recent Principal Financial Well-Being Index, 45% of American adult workers and 32% of retirees surveyed indicated their biggest financial planning regret was starting to save too late for retirement. Twenty-seven percent of workers and 22% of retirees said they regretted saving too little in their early working years. Nine percent of workers and 10% of retirees said they regretted managing their own financial planning. Harris Interactive conducted the index, which surveyed American adult workers at growing businesses with 10 to 1,000 employees.
When asked the most important lesson you can learn from financial planning assistance, 20% of workers and 19% of retirees said diversifying their portfolio. Another 16% of workers and 10% of retirees said investing the maximum in 401(k)/403(b) plans, IRAs or non-qualified plans was the best advice they’ve received.
The researchers recommended that Americans should be saving up to 15% of their paychecks during their working years in order to replace 85% of their income in retirement. Yet only 8% of the workers surveyed who participate in their company’s 401(k) plan are saving this amount. Twenty-one percent of those surveyed who are eligible to participate in their company’s 401(k) plan do not currently participate at all. Forty-two percent of those questioned said they are saving between 5% and 10% of their paychecks.
When it comes to thinking ahead to retirement, there are many financial issues that disturb Americans. More than 43% of U.S. adult workers, and 26% of retirees, said the ability to afford good medical care is a concern. Forty-two percent of those surveyed responded that being able to enjoy the same quality of life they live now was their greatest concern. Thirty-eight percent of adult workers responded that being able to afford basic necessities in retirement was their chief worry. However, the issue cited most often by retirees is the rising cost of inflation reducing purchasing power. But when asked if they had a plan to transition retirement savings into a steady income stream in retirement, only 51% of retirees had one.
The researchers noted that taking the time to plan for the retirement transition, with help from a financial professional, can mean the difference between achieving financial well-being in retirement or not. Why not contact Al Gibbons today to discuss a retirement transition plan that will help you maintain your quality of life when you retire?
Albert E. Gibbons
1288 Valley Forge Road, #53
Phoenixville, PA 19460