This annual study shows that among workers 55 and older, more than four in 10 have retirement savings under $25,000. For younger workers, of course, this number increases greatly. Jack VanDerhei, co-author of the study, attributes this to over-confidence, caused in part by a traditional reliance on employee benefit programs such as pensions. The trend in the workplace, however, is to do away with pensions, leaving workers without the support they may have expected during their retirement years.
Many companies are also eliminating retiree health care coverage, yet another aspect of retirement that makes the results of the study quite troubling, notes VanDerhei.
"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."
The authors of the study believe that individuals should take the time to calculate what their costs during retirement will be and plan accordingly. According to the study, only about 42% of those surveyed have done these calculations. For many, it’s just a lack of knowledge, notes VanDerhei. He believes that individuals should find a fee-based financial planner to help them determine their future needs. The few hundred dollars spent on professional help will be well worth it in the future, he says.
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By: Zaman.26.male Posted: May 13 2006 07:59:50 AM