ING U.S. Encourages More Consumers to Make Retirement Planning and Saving a Priority in the New Year
As Americans begin to make their resolutions for the New Year, new findings from the ING Retirement Research Institute suggest that better retirement planning and saving should be high on the list. According to recent findings, 71 percent of Americans do not have a formal investment plan to help them reach their retirement goals.
The ING U.S. study1 — Retirement Revealed — also showed that while 75 percent of respondents aged 25 to 69 who are employed full-time with an annual income of $40,000 or more are contributing to their workplace retirement plan, nearly half (48 percent) do not feel prepared for retirement.
“Most consumers today face a number of competing financial priorities. But one thing they should not lose sight of is the importance of properly preparing for their retirement,” said Maliz Beams, CEO of ING U.S. Retirement. “The good news is that more people are becoming aware of what it takes to reach their goals. Our mission is to continue raising awareness, while helping them plan and save so they retire with the dignity and financial security they deserve.”
Alongside the study findings, ING U.S. has identified several simple but important savings resolutions that can keep Americans on track to meet future financial goals.
Resolution #1: Make Saving a Personal Responsibility
Individuals are responsible for retirement more than ever before. The responsibility of planning and saving involves not only building up a sufficient nest egg, but also making sure those savings last a lifetime while protecting against unexpected financial pitfalls. It also means developing a comprehensive approach—creating a financial plan, getting advice from a trusted professional and utilizing a variety of savings strategies both in and out of the workplace.
Resolution #2: Enroll in a Workplace Plan
Participating in a workplace retirement plan is often the cornerstone of most successful retirement programs and one of the first and best places to start saving. These plans offer a number of benefits, including the convenience of having investments directly deducted from a paycheck; tax-deferred growth on savings; company matching, when available and choice and control over how to invest. According to ING’s study, respondents who currently contribute to a workplace plan have saved an average of $69,000 in those plans, with 72 percent currently receiving the full employer match.
Resolution #3: Gain Greater Control over Assets
Take advantage of multiple savings opportunities when possible. According to the study, more than half of the respondents (58 percent) are saving outside a workplace retirement plan in such places as an individual retirement account (IRA), Roth IRA, traditional bank account, CD or brokerage account, with an average of $46,000 saved. At the same time, make sure to inventory and control all assets so they are being maximized. Having "idle" or "orphaned" retirement savings accounts is not an efficient way to achieve financial goals. Evaluate rollover and IRA consolidation options, which can generally help to lower custodian fees, enhance portfolio management, reduce paperwork and improve beneficiary designation planning.
Resolution #4: Calculate Retirement Needs and Evaluate Savings Rates
After choosing to participate in a workplace plan or opening up an IRA, the most important decision an investor makes is setting their contribution level. However, many people lack a clear understanding of contribution rates and how even small changes can produce significant results over time, impacting whether or not retirement goals are reached. Only 43 percent of those surveyed calculated how much money they will need in retirement to continue their current lifestyle. Understanding the projected savings that different contribution levels can produce, and considering things like tax impact, compounding and the effects of employer matches can make a huge difference in retirement preparation.
Resolution #5: Get Education, Information and Professional Guidance
Knowledge is power, and it can be critical for achieving a positive outcome in retirement. Support, guidance and information can come in many forms—in person, over the phone, through “self-help” online tools or through an employer. According to those surveyed, almost half (47 percent) expect their employer to do more to educate them about retirement options. Still, others would like additional guidance beyond what their employer might offer. In fact, those in the survey valued face-to-face communication with a financial professional as the most vital for getting information about their retirement plan and other employee benefits. Yet only 28 percent are currently working with a financial professional, which indicates that this type of help may be something to consider for the New Year.
1 Findings are from an online survey conducted during the period of October 5-13, 2011. Respondents were 4,050 adults (2,026 men and 2,024 women) between the ages of 25 and 69 who are employed full-time with an annual household income of $40,000 or greater. Data were weighted to make the results representative of the U.S. population.
About ING U.S.
ING U.S. includes the U.S insurance, retirement and asset management businesses of Dutch-based ING Groep N.V. In the U.S., the ING (NYSE: ING) family of companies offers a comprehensive array of financial services to retail and institutional clients, which includes life insurance, retirement plans, mutual funds, managed accounts, alternative investments, institutional investment management, annuities, employee benefits and financial planning. ING holds top-tier rankings in key U.S. markets and serves approximately 15 million customers across the nation. For more information, visit http://ing.us.