Retirement Savings Advice From Retirees
More than half of current retirees (54%) are confident they will be able to live comfortably throughout retirement. In contrast, only a quarter of those below the retirement age and currently employed (“current workers”) are confident about having enough income in retirement, according to the latest BlackRock Annual Retirement Survey.
The retirees have useful advice for current workers. Specifically, they suggested workers should save early and as much as they can. More than 80% of retirees who described themselves as confident also said workers should:
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- Increase their retirement contribution savings whenever they are able to (90% of confident retirees did this);
- Make the most of their 401(k) plans (87% of confident retirees did this);
- Estimate retirement income needs before retiring (84% of confident retirees did this); and
- Review retirement savings strategy on a regular basis (83% of confident retirees did this).
Those retirees who were less confident had four major regrets. Those regrets were not making the most of their 401(k) plan, not enrolling in the plan early enough, not making a financial plan for saving and not saving the maximum amount allowed by their plan.
Nearly all of the retirees (90%) surveyed think retirement plan sponsors should help plan participants understand their financial requirements in retirement. Current workers were open to advice, but not intervention. More than 85% of workers said they wanted their plan sponsors to advise them on how much to save as well as the ideal asset allocation and risk level for someone their age. They also want to be notified if their allocations move too much out of sync for someone their age. A much smaller number, however, wanted plan sponsors to automatically reallocate their portfolios (43%), automatically increase retirement plan contributions annually (37%) or automatically decide the amount to deduct if a worker is not saving enough (28%).
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