Everyone knows that major financial disruptions such as unemployment, divorce and health issues can and do strike a blow to retirement savings. TD Ameritrade has now put a number on it: $2.5 trillion in lost retirement savings.
According to the firm, 66 percent of the 2,019 adults it surveyed had experienced a disruption in their long-term financial planning and retirement saving.
The most common financial disruption cited by those surveyed was a loss of a job or having to take a lower-paying job.
Eighty-four percent of those polled said that they had been saving at a rate of on average $500 per month for retirement, but 79 percent of those polled had to reduce retirement savings on average by $300 per month. Half needed to withdraw from their savings or borrow money to stay afloat. Forty-nine percent of those who experienced disruptions will need to delay or forgo retirement, and those who are once again meeting their long-term savings goals took nearly five years to rebuild to that point.
No wonder, then, that 46 percent of those who experienced disruptions said they wish they would have saved more of their income. Thirty-six percent said they would have started saving for retirement earlier and 26 percent reported wishing they had been better educated on long-term savings and investing.
Along those lines, those who have managed to retire comfortably cite the importance of careful financial planning in their retirement success.
In an earlier TD Ameritrade survey of recently retired baby boomers those polled named the following strategies as key to their being financially stable upon retirement:
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Limiting use of credit (67 percent);
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saving early and consistently (58 percent);
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spending less on luxuries/discretionary items (58 percent);
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investing in/maintaining a well-balanced portfolio (51 percent).
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