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Study: Americans Too Confident About Retirement Planning

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http://www.foxnews.com/story/0,2933,190461,00.html

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NEW YORK — The majority of American workers think they'll be able to retire comfortably, but most aren't saving nearly enough to meet that goal, according to a new study.

The Employee Benefit Research Institute's annual retirement confidence survey, released Tuesday, found that about 68 percent of workers are confident about having adequate funds for a comfortable retirement, up slightly from 65 percent in 2005.

At the same time, more than half of all workers say they've saved less than $25,000 toward retirement, according to the Washington, D.C., based research group. Even among workers 55 and older, more than four in 10 have retirement savings under $25,000.

"`Overconfidence' is the word that comes to mind," said Jack VanDerhei, co-author of the study.

He said that the poor savings performance was especially troubling because it comes as many of the nation's employers are eliminating the defined benefit plans — better known as pensions — that have buoyed the retirements of current workers' parents and grandparents. Many companies also are eliminating retiree health care coverage or asking retirees to contribute more for it.

"It's clear that people currently working should factor into their retirement planning the long-term trend away from traditional defined benefit pensions," VanDerhei said. "That means people need to be saving more than they are."

Not all was doom and gloom in the report, the 16th in a series begun in 1991.

More than 70 percent of workers say that they or their spouses have saved something toward retirement — a percentage that's held fairly level for the past six years, EBRI said.

And while many have meager savings, others are doing quite well at accumulating retirement nest eggs, the study found.

While more than half of workers have less than $25,000 set aside, 12 percent have $25,000 to $49,999; 12 percent have $50,000 to $99,999; 11 percent have $100,000 to $249,999; and 12 percent have $250,000 or more.

As would be expected, older workers generally have more set aside than younger workers, with 12 percent of those 55 and older reporting account balances of $100,000 to $249,999, and 26 percent with accounts of $250,000 and up.

VanDerhei believes that people would save more if they took the time to project what their costs in retirement are likely to be. But just 42 percent of workers say they've done such a calculation.

He suggests that people who are comfortable with managing their own accounts can do well with online calculators, including the Ballpark Estimate calculator that can be found on EBRI's sister site at http://www.choosetosave.org/ballpark.

"But some people are absolutely clueless about this and frozen into inactivity as a result," he said. "They really should find a fee-based professional to help them out. It's going to cost a couple of hundred dollars, but you'll make that amount up many times in the future."

The study also found that workers are eager for help in saving more.

Nearly 70 percent of workers said they were either strongly favorable or somewhat favorable to 401(k) and other retirement plans setting up automatic enrollment for new workers, and almost the same percentage favored automatic increases in employee contributions.

Dan Houston, senior vice president for retirement and investor services with Principal Financial Group Inc. in Des Moines, Iowa, said that if workers are told they aren't saving enough, most are willing to increase their 401(k) contributions — including automatic increases each year.

He added that workers should aim to save enough to replace 85 percent of their preretirement income when they stop working, not the 70 percent that many workers believe is adequate.

That may sound daunting, but Houston said a 25-year-old man or woman entering the work force today who immediately starts saving 15 percent of income will be able to retire at 60 with enough savings to do that.

"If you adjust your standard of living right after school, and learn to set aside 15 percent — either by salary deferral or company match — it's doable," he said.

A number of large companies have begun introducing automatic enrollment into their plans to try to get higher participation by younger and lower-income workers, but adoption hasn't become widespread.

The survey was conducted by Mathew Greenwald & Associates, a survey research firm based in Washington, D.C. It involved phone interviews with more than 1,250 individuals, with a margin of error of plus or minus 3 percentage points. Principal Financial was among the underwriters of the study.



Work sucks today, I was looking outside at the beautiful weather and wondering what I would have to do to retire sometime soon. Needless to say, I won't be retiring in my 30's! :D

Seriously though, the 'Ballpark Estimator' was pretty cool. I've used other tools before, but this was the simplest and most straight forward. Just thought I'd share to help out my peeps!

J
Shhh... you hear that sound? That's the sound of nobody caring!

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"But some people are absolutely clueless about this and frozen into inactivity as a result," he said.



That's definitely me, I have no idea what to do and at the end of the day I'm too exhausted to try and figure it out. I think I see "Wal-Mart Greeter" in my future. :ph34r:
She is Da Man, and you better not mess with Da Man,
because she will lay some keepdown on you faster than, well, really fast. ~Billvon

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That's definitely me, I have no idea what to do and at the end of the day I'm too exhausted to try and figure it out. I think I see "Wal-Mart Greeter" in my future



Dammit woman, that's my plan! Go find yourself a sugar daddy to support you! :D;)

Man, you know it's a slow day when I'm posting about retirement in the bonefire! :D Hopefully someone finds it useful/interesting. [:/]

J
Shhh... you hear that sound? That's the sound of nobody caring!

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"But some people are absolutely clueless about this and frozen into inactivity as a result," he said.



That's definitely me, I have no idea what to do and at the end of the day I'm too exhausted to try and figure it out. I think I see "Wal-Mart Greeter" in my future. :ph34r:



Ditto![:/] I'll never be able to affor to retire, this skydiving bit is just to demanding on the $$! :D

Although, I did start saving almost 6 years ago, its not much, but all I can do is hope for good returns! :|
Goddam dirty hippies piss me off! ~GFD
"What do I get for closing your rig?" ~ me
"Anything you want." ~ female skydiver
Mohoso Rodriguez #865

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Go find yourself a sugar daddy to support you!



Do you know any? I'm taking applications. Hell, I live in FL, I should be able to find just one down here! :ph34r:
She is Da Man, and you better not mess with Da Man,
because she will lay some keepdown on you faster than, well, really fast. ~Billvon

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Go find yourself a sugar daddy to support you!



Do you know any? I'm taking applications. Hell, I live in FL, I should be able to find just one down here! :ph34r:



Ive got about $3.50, is that enough? :P
Goddam dirty hippies piss me off! ~GFD
"What do I get for closing your rig?" ~ me
"Anything you want." ~ female skydiver
Mohoso Rodriguez #865

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I'll be your sugar daddy!



Ding, ding..we have a winner and I don't even have to learn Yiddish! :ph34r:

Yardhippie, you can't apply, you're married! :P
She is Da Man, and you better not mess with Da Man,
because she will lay some keepdown on you faster than, well, really fast. ~Billvon

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I'll be your sugar daddy!



Ding, ding..we have a winner and I don't even have to learn Yiddish! :ph34r:

Yardhippie, you can't apply, you're married! :P



Not true! I'll get permission from both my wives! :S:D

The best part about current wife #2: she dont live with me, and she dont take my $$!:D
Worst part: she drinks my booze, eats my food, sleeps on my air mattress (rarely), and dont fix me no sammiches.>:(
Goddam dirty hippies piss me off! ~GFD
"What do I get for closing your rig?" ~ me
"Anything you want." ~ female skydiver
Mohoso Rodriguez #865

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Well, when a large portion of the American public believes that the best ways to achieve wealth are: 1) Lottery winnings; 2) lawsuits; 3) game shows/reality shows; and 4) professional sports, then you've got this situation.

Don't worry, though, folks. Da Gubment will be there to help you. We can rely on Social Security. We haven't worried about taking care of ourselves for 50 years now.

Over 5,000 years ago, Moses said to the children of Israel, "Pick up your shovels, mount your asses and camels, and I will lead you to the Promised Land."

Nearly 5,000 years later, FDR said, "Lay down your shovels, sit on your asses, and light up a Camel; this is the Promised Land!"


My wife is hotter than your wife.

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i'm on the 'work 'til i die' plan. :S.

actually, if i can stay with my current employer for another 20 years or so, i'll be okay. a little insane (or a little more insane, depending on how i'm perceived), but okay for dollars.
"Hang on a sec, the young'uns are throwin' beer cans at a golf cart."
MB4252 TDS699
killing threads since 2001

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this is the Promised Land



[sarcasm]

I'll be taking applications soon for any young "you're a hottie and you know" types who will be willing to sponge off of my ties to the "new" promised land (the Saudi of the North ... Alberta Canada and it's oil sands). Of course currently it's not even remotely close to being a skydiving haven. But I figure with global warming, in X number of years from now it'll be pretty darn nice there and as long as the tree huggers don't expedite the leaders of the free world to develop any alternative energy plans anytime soon, the good people of Alberta will be basking in their wealth for years to come. Now I by no means should NOT be confused with one of the really wealthy Alberta SOBs (who can resemble Texans at times), but I do own a very small piece of the pie there and am not as bad off as some other Ice-backs, Wet-backs and Yankee-doodle dandies when it comes to having to provide for myself in the future.

[/sarcasm]

PS: I think we're all ####ed. :)


Try not to worry about the things you have no control over

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mmmm -

Can't beleive it but it's sadly true.

I've been a good boy, have put at least 5% of my gross into my 401(k) and my employer has been generous with thier profit sharing (at least 10% of my gross every year for the last 7 years-) which also goes into the same funds as my 401(k) is, and according to the last report from our retirement guru, I will be able to retire making more than I do before retirement.

After the divorce is final I'll be increasing the amount I contribute and doing the Roth IRA thing.

And I'll be retiring in Mexico.

Anyone care to join me?

Has it been easy? Not always, but after you get used to it you really don't notice the deductions coming out. (Discipline) And it feels really good when you see that balance getting bigger and bigger each quarter! (Invest agressively!)

Easy Does It

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"Writing for a penny a word is ridiculous. If a man really wants to make a million dollars, the best way would be to start his own religion" - L. Ron Hubbard




No, THAT'S funny!:D:D:D:D

What a gem!
----------------------------------------------
You're not as good as you think you are. Seriously.

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Anyone care to join me?



Hmmm, I've been pretty responsible (too responsible?) with my savings as well. Maybe I can afford to buy a Mexican version of The Playboy Mansion when I retire? :)
I can have hot young latin women walking around naked all day, satisfying my every need and desire, over and over and over.... :$:)
Oh yeah! I'm liking your Mexico idea! Hopefully the exchange rate will be just as good (for me) in the future! :)
J
Shhh... you hear that sound? That's the sound of nobody caring!

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One of the technicians working for me lived near a "little America" area in Mexico. Lots of retirees living very well for cheap. He's the same age as I, we both talk about retiring there at the same time. I'm seriously going to take a trip down that way in a few years to scope things out.

Easy Does It

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Don't worry, though, folks. Da Gubment will be there to help you. We can rely on Social Security. We haven't worried about taking care of ourselves for 50 years now..



I think it's only fair that we support all the less motivated people who have been content with mediocrity their whole lives! :S
Shhh... you hear that sound? That's the sound of nobody caring!

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I can have hot young latin women walking around naked all day, satisfying my every need and desire, over and over and over....



Gee, you being my Sugar Daddy didn't last very long. I guess I DO need to learn Yiddish! :P
She is Da Man, and you better not mess with Da Man,
because she will lay some keepdown on you faster than, well, really fast. ~Billvon

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He's the same age as I, we both talk about retiring there at the same time. I'm seriously going to take a trip down that way in a few years to scope things out.



If you don't mind sharing the name of that area, please PM me! Hopefully it's near the beach?
Shhh... you hear that sound? That's the sound of nobody caring!

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