Study Shows Americans Lag Behind In Retirement Readiness
Experience the interactive Multimedia News Release here http://www.multivu.com/players/English/7446751-voya-financial-retire-ready-index/
The Voya Retire Ready IndexTM was designed on the premise that successful retirement preparation involves three important components – 1) sufficient knowledge and awareness of how to prepare ("knowing"); 2) accurate and comprehensive planning activity ("planning"); and 3) adequate savings to generate sufficient income replacement ("having"). The study incorporated two surveys that were conducted with
The findings show how Americans are generally behind in their readiness, and that planning represents their most significant hurdle as well as the area with the most opportunity for improvement. Workers who were surveyed for the Voya Retire Ready IndexTM averaged an overall score of 4.1 out of ten, while Retirees averaged a 5.5.
"As the retirement landscape evolves, individuals have taken on greater responsibility to plan and save so they can reach their future retirement readiness goals," said
Knowledge is Power...But Requires Action
Voya's study found that out of the three categories, both Workers and Retirees score highest on knowledge, but lowest in planning. Workers average a 3.0 in the planning category, while Retirees score slightly better at 4.2. The findings show that fewer than one-in-five Workers (17%) and only about one-quarter of Retirees (26%) had a written financial plan, while roughly one-third of Workers (31%) and Retirees (35%) had a comprehensive budget. The study also reveals gaps in retirement income planning, as more than six-in-ten Workers (63%) had never attempted to calculate what their savings would be if converted into future monthly income.
"While knowledge of retirement-related concepts is an important foundation which should always be improved, the findings reinforce what we know is required to help advance retirement readiness — more individuals need to put their knowledge to action," noted Nichols. "That's why resources such as Voya's myOrangeMoneyTM and online budget tools are critical to helping Americans take the necessary steps toward developing a true long-term retirement plan."
Despite their low planning scores, a significant majority of those surveyed for the Voya Retire Ready IndexTM agreed that certain planning-related activities would boost their sense of confidence and control. More than eight-in-ten Workers (83%) and three-quarters of Retirees (76%) confirmed that calculating the amount of future monthly income their savings produced would provide at least a moderate boost in confidence. Two-thirds of Workers (66%) said using self-directed financial planning and budgeting tools would provide this same benefit.
"We know this disconnect between what people say could help improve their financial security and what they actually do is caused by a number of factors, including inertia, anxiety, competing financial priorities and the fact that many view retirement as a distant concern," said Nichols. "Still, our findings demonstrate that some are successful in breaking through these barriers."
"Role Models" on the Voya Retire Ready IndexTM
Voya's study found that a sub-set of Workers and Retirees did report to be more proactive and well-prepared, and they averaged the highest scores on the Voya Retire Ready IndexTM. These individuals engaged in behaviors which put them into Voya's "role model" category for readiness. Some of the key findings related to these two highest-scoring groups include the following:
- Nearly two-thirds of the Workers (65%) had a written budget, and almost half (45%) had a formal written financial plan.
- More than two-thirds of the Retirees (68%) had a financial plan and approximately eight-in-ten (81%) had a relationship with a financial professional.
- A significant majority of Workers (85%) and just over half of Retirees (51%) reported owning more than
$100,000 in life insurance coverage. - More than eight-in-ten Workers (82%) and nearly the same number of Retirees (78%) had a specific strategy for investing their assets.
- Nearly all of the Retirees in this group (97%) were happy with their financial security, and more than eight-in-ten (81%) retired because they wanted to.
- Nearly all Workers in this group (96%) reported to be somewhat or very confident in how well they were prepared for retirement.
"Perhaps the most surprising insight is that today, through innovations in financial technologies and increased access to professional advisors, Americans have more ways to take action, build confidence and improve their chances for achieving a secure retirement," added Nichols. "Our challenge is to ensure that more people know where to find these resources and that they take the necessary steps."
Voya offers retirement customers a suite of accessible, compelling and easy-to-use retirement readiness planning resources — from field- and phone-based financial professionals, to a number of innovative digital planning and budgeting capabilities. These resources are available to help individuals with a broad range of activities, such as understanding their retirement income needs to budgeting and protecting their financial security.
For more information and additional findings from the Voya Retire Ready IndexTM study, please visit http://go.voya.com/IndexReport.
As an industry leader and advocate for greater retirement readiness, Voya is committed to delivering on its vision to be
Media Contact:
Joe Loparco
Voya Financial
Office: 860.580.2677
Cell: 860.462.6525
[email protected]
1. The Voya Retire Ready IndexTM results are based on findings from two online consumer surveys completed
About
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/voya-financial-study-reveals-how-americans-score-on-their-retirement-readiness-reinforces-the-importance-of-planning-300057234.html
SOURCE
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News