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Are You on Track to Retire Comfortably?

Posted on | July 22, 2008 |

According to a recent BankRate poll:

“Only about three in 10 workers (28 percent) expect to have enough money to retire comfortably. “

“Only about three in 10 workers (28 percent) expect to have enough money to retire comfortably”

Summary:

* “One-third (33 percent) say they’ll have just enough to get by.

* Two out of 10 (17 percent) say they will not have enough money to retire without worrying.

* Nineteen percent say they are afraid they’ll never be able to retire.“

Which group are you in?

Chances are, if you’re in the 69% outlined above it’s because you made emotional decisions to make the wrong move at the wrong time. That’s what the analysis of the report is from BankRate.

What kinds of mistakes?

“One out of six Americans have increased their retirement savings as a result of the slumping economy. …But experts are stunned that nearly 16 percent have actually increased the amount they’re saving as a result of the current economic downturn. “

I’ll say! Economic downturns are exactly the time people should be buying more equities in their retirement accounts. Of course, even if you’re setting aside the same amount as you were 2 years ago you’re buying more now. That’s the beauty of dollar cost averaging. But here’s the other thing - “experts are stunned”! I think this is because experts don’t have a handle on the average person and his knowledge or awareness of investing.

Experts are stunned because they are financially literate and know you should buy more when the market is down and buy less when the market is up, all other things being equal. But the average “man on the street” only hears and sees that the world in general and the economy in particular is going to hell in a hand basket week after week in the papers and the nightly news. There is a definite lack of context and historical perspective in the news media today, and the financial media isn’t very different.

“”That seems to me very hard to explain, or understand,” says Alicia Munnell, director of the Center for Retirement Research at Boston College.”

Because they have financial training and don’t feel the fear and panic the average worker feels.

To be fair, it isn’t as though the majority of 401(k) and IRA participants is pulling their money out of the retirement fund in favor of the mattress.

Here’s the breakdown:

  • 15% Decreased contributions.
  • 16% Increased contributions.
  • 73% Kept contributions the same.
  • 8% Stopped contributing altogether.
  • 9% Made a withdrawal from your IRA or taken a loan from your 401(k) or retirement account

But the 27% that have put their retirement in question, if not jeopardy, by decreasing contributions or withdrawing funds prematurely are only shooting themselves in the foot.

Have you cut back on your retirement savings? If so, do you regret doing so?

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Comments

2 Responses to “Are You on Track to Retire Comfortably?”

  1. Blackhatseo
    July 22nd, 2008 @ 1:59 pm

    Added. Nice work on this one. Btw, my blog is dofollow, stop by and grab a link. Walter

  2. Import from China
    July 24th, 2008 @ 7:47 am

    I came across this blog the other day and you got some great info here - thanks.

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