Members of Generation X believe they will need to save at least $1 million before they can retire. Who can help them save it?
According to new research from the ING Retirement Research Institute, more than half (52 percent) of the respondents in an ING U.S. consumer survey said they would be motivated to save more for retirement if their nest eggs didn't measure up to those of their peers.
Additionally, better than one-quarter (27 percent) confirmed that the size of their retirement account was an important attribute for benchmarking themselves against others--more significant than their material possessions (17 percent) and salary (16 percent).
The urge to compare didn't stop in their golden years, either. Study results showed that nearly two-out-of-ten people (19 percent) already in retirement still want to "keep up with the Joneses" when it comes to their quality of life and financial independence.
These findings support a growing trend noted by ING U.S. over the past three years through its pioneering, web-based peer comparison tool, INGCompareMe.com. The tool, available to the public at no cost, allows users to compare themselves to others on a range of saving, spending, investing, debt and personal finance matters. Users create an anonymous profile by entering some basic information. They can also select categories such as hobbies, interests and where they live to align even more closely with their peer set.
"From restaurant reviews to healthcare referrals, consumers are increasingly scanning the social landscape for peer information and validation," noted Patrick Kennedy, chief marketing officer for ING U.S. Retirement."This is also true for personal finance matters, such as saving for retirement. People are curious to know how they stack up to their counterparts, and a tool like INGCompareMe.com can provide a helpful benchmark. The data we collect can also be used to identify savings patterns and trends that support our broader goal of helping Americans retire in the manner they expect and deserve."
Mapping Out the Retirement 'State of Savings' in America
Leveraging this data from its peer comparison tool, ING U.S. developed the ING State of Savings interactive map, available at INGStateofSavings.com. This map provides a state-by-state scan and ranking of how Americans say they are saving across the country, applying two different formulas.
One formula measures the average amount that residents of each state have collectively saved for retirement as a percent of their total estimated needs, with adjustments made for age. This metric is referred to as Savings Progress.
According to the analysis, the following three states ranked the highest in terms of Savings Progress:
-Hawaii residents have saved 51 percent of their estimated needs for retirement.
-New York residents have saved 49 percent of their estimated needs for retirement.
-Nevada residents have saved 48 percent of their estimated needs for retirement.
A second formula measures the average amount that residents of each state have saved up, as a multiple of their annual household income. This metric is referred to as Savings Score.
According to the analysis, the following three states ranked highest in terms of Savings Score:
-New Mexico residents have saved 4.56 times their annual income.
-Vermont residents have saved 4.35 times their annual income.
-South Carolina residents have saved 3.78 times their annual income.
Nationally, the average Savings Progress for Americans overall was at 39 percent, while the Savings Score was 2.42.
The ING U.S. consumer survey found that over one-third (34 percent) of Americans believed where they live has a significant impact on their ability to save for retirement. This might help to explain, in part, how well a state fared on the list developed with the web tool data.
"Through this research and analysis, our goal is to offer Americans another thought-provoking benchmark for retirement savings. No matter how high or low a certain state is on this list, what ultimately matters is having a plan in place that meets an individual's own personalized needs," added Kennedy. "For most people, retirement today has been fundamentally redefined. As the responsibility to self-fund retirement continues to increase, individuals must find ways to improve their level of financial education, awareness and readiness."
ING U.S. constitutes the U.S.-based retirement, investment and insurance operations ofNetherlands-based ING Groep N.V.
Full list of the rankings and to access the interactive map:
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