Retirement Survey: Debt Down, Confidence Up
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The 2015
"Debt can be a huge distraction from savings goals, and many may view it as a reason to not save anything for retirement," said
Reports of increased confidence are almost exclusively from those who indicate they or their spouse has a retirement plan (defined-contribution, defined benefit or individual retirement account). Nearly half of workers without a retirement plan are not at all confident about their financial security in retirement, compared with only about one in 10 who have a retirement plan.
If automatically enrolled in an employer-sponsored retirement plan at a 6 percent salary deferral rate, three-quarters of respondents would continue that 6 percent contribution or raise it. Similarly, 46 percent would continue auto-escalation of their contribution (increasing 1 percent per year) until the contribution reached 10 percent of their salary or higher.
"Workers are recognizing the value of automatic features in their employer-sponsored retirement plans in helping them reach their savings goals," Vandermillen said. "Our analysis over the years has found that saving 10 percent of your salary, plus any employer match, over the course of a working career is the key to achieving a more secure retirement[1]. These simple, yet critical, plan features can make a huge difference."
Despite improvements in confidence levels and issues with debt, many of the warning signs about lack of preparation have not changed. Nearly two-thirds of workers say they are behind schedule in planning and saving for retirement. And only one third spend more than eight hours a year—or about one working day—on planning for retirement.
Other key findings include:
- 21 percent of workers estimate they will need
$1 million or more to live comfortably in retirement, an increase from 15 percent back in 2005. - 69 percent of workers think it is possible for them to save an additional
$25 a week for retirement.- Nearly half of workers could save an extra
$25 a week by cutting back on eating out or getting takeout food. - 24 percent would not have to give up anything to save an extra
$25 a week.
- Nearly half of workers could save an extra
- Half of workers have long-term disability insurance, either on their own or through their employer.
- A third of workers believe a six-month disability would have no effect on their retirement or preparation for retirement.
Full survey results are available at www.ebri.org. For more research, analysis and insights from The Principal®, visit The Principal Knowledge Center and connect with us on Twitter.
About the
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[1] Based on analysis conducted by the
[2] "The
[3] As of
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