Can you predict how much you'll actually need at retirement? If you've set a retirement income goal for yourself, chances are you're in a better position to actively manage how you're going to reach that financial goal, according to new analysis from Diversified.
Diversified's Retirement Research Council found employees have become more active in their retirement planning within the last year. Specifically, 29 percent of respondents to its survey established a retirement income goal in the past year, an eight percentage point increase from 2010.
Forty-one percent increased the amount they are saving for retirement, a three percentage point increase over last year. In addition, 62 percent of those surveyed said they monitored their retirement outlook to assess where they stand vis-à-vis their retirement income goals and for insight into how they can adjust their asset allocation or contribution level to improve their outlook.
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What's more respondents emphasized the need for better education on retirement goal setting, with 71 percent of respondents who are not confident they will have enough for retirement saying they were likely to contribute more to their retirement savings accounts if they were educated on how much they actually needed to retire.
Participants overall indicated they want this kind of assistance as well – 57 percent expressed interest in getting help with setting goals and 50 percent would welcome assistance with monitoring goal progress.
"These results are a very positive indication that people have become much more attuned to the responsibility they have in meeting their retirement needs and that participant communications and education can have a meaningful impact on helping them reach a funded retirement," noted Patricia Advaney, senior vice president of Participant Solutions for Diversified. "This is really a call to action to the industry. Even though the burden of funding retirement has decidedly shifted to participants, employers and plan providers can play a critical role in helping them to that end."
Among the survey's other findings:
- Participants are saving more for retirement—66 percent of participants are saving 6 percent or more, a six percentage point increase over the number of respondents doing so a year ago.
- While most participants have a retirement goal, they are not very confident they will have enough for retirement and 35 percent were simply guessing about the amount they needed.
- Less than one-in-three participants are confident about the amount of income they will have in retirement: only 7 percent said they are extremely confident and 21 percent said they are very confident. Those without a goal are even less confident, with only 2 percent saying they are extremely confident and 6 percent very confident
- The good news is that participants are increasingly interested in seeking help to establish a retirement income goal: there was an eight percentage point increase in the number of participants who want help in creating goals over last year (now 57 percent). Fifty-two percent want help understanding their investment options (a 12 percentage point increase from last year's survey) and 50 percent want help measuring progress toward their goals (a 10 percentage point increase over last year).
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