Boomers could be in for a shock. Although they're the age group closest to retirement, according to a study of 401(k) participants by by Natixis Global Asset Management, 33 percent of them have less than $50,000 put away for the big day, even though they say they'll need a 401(k) balance of $805,000 to cover living expenses in retirement.
On average, boomers have put away $258,898, only about a third of what they'll need, while millennials — who appear to be underestimating their retirement financial needs because of their age, believing the magic number to be $822,000 — have already done better than that. They've got an average of $91,215 in their retirement plans and years of saving ahead.
GenX (ages 34-47) isn't doing a whole lot better than boomers, although they seem to have more realistic expectations of how much they'll need than millennials do. Their goal is just over $1 million, while they've saved an average of $203,801. Of course, they have more time than boomers do, but their target is higher.
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"Investors of all ages should take a second look at how much they save and what their needs are likely to be when they retire," said John Hailer, CEO of Natixis Global Asset Management in the Americas and Asia. "While many workers get it right, others might ask if their investing targets will get the job done," he added. "Too many seem to be setting the bar too low because they may lack access to the proper tools, education and guidance."
On the subject of tools, most participants don't use them. While 64 percent say their plans have retirement calculators, only 38 percent have ever given it a shot; 53 percent say their plans offer personalized benchmarks, while only 23 percent have tried it; and 59 percent say their plan provides a dollar amount showing current income that savings would produce in retirement, but only 37 percent have used it.
Some good news: the chief motivator to get employees to participate is the employer match (48 percent). Ninety percent of survey respondents eligible to participate in a 401(k) are doing so, and 93 percent have recently increased their contributions; 72 percent say they have never missed a contribution.
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