Wednesday, November 30, 2011

Simple Graphs: Not Ready for Retirement? Inforgraphic from Mercer Insights

While I talk a lot about how a happy retirement happens in the 6 inches between your ears, I do know that a financial reality check is in order before you retire.  Being satisfied with what you have is one thing but making foolish decisions based on cluelessness is another.  People are paying closer attention these days it appears and the financial outlook has them worried.

When future retirees were surveyed about their retirement savings by a consulting firm called Mercer, their answers were very telling. The graph below was created as a result of a survey called What's Working.  The results of the survey painted a picture of uncertainty for retirement possibilities.  Why the uncertainty?   I think Arthur Noonan, partner in Mercer put it perfectly:
“We have seen defined benefit plan freezes and terminations in recent years, combined with the worst decade of S&P performance,” he says. “Add to this the large bubble of workers – the boomers – reaching retirement age, increased media attention on retirement issues and talk of possible Social Security cuts. People’s sense of security has been shaken.”  Arthur Noonan, a partner in Mercer’s Retirement, Risk & Finance from Mercer 
Here is the information we were invited to use by the Mercer group.

Not ready for retirement
It seems that while employees rate retirement benefits at the top of their list of desired perks, the type of plan influences their confidence.  A 401(k) is is the most desirable.  It could be that workers need to be  looking a little harder at types of retirement plans when they change employers. A 401(k) allows employees to transfer the money to another qualified plan.  If that new employer does not have a qualified plan, the employees could be looking at a large tax fee for withdrawing funds.  Remember, 401(k) is from pre-taxed money.

The survey tells us that if you are a woman, you don't think you are doing enough to insure your retirement.  Less that 45% of all employees feel that they are saving enough to insure retirement.  But if you are a woman, that number drops to less that 39%.

Younger employees are feeling more positive.  In the 25-34 age bracket, 50% or more feel they and their current employer are doing a good job with their retirement plan.  But in the aging population the confidence levels fall significantly.

Retiring in style is not easy these days but picking the right retirement plan (one that can be moved from one employer to another or one that is not taken from pre-taxed income?) may be the key if you are young.  If you are over 50 it becomes more difficult.  Living on less NOW may save your retirement from disappearing all together.  Remember, even though you are living as though tomorrow will never come, it probably will anyway!

It is just a thought.


  1. Frugal living should be practiced by everyone while still young. There are two problems that I see. 1)There are way too much baby boomers, I don't think the economy can handle them if they all retire at the same time and 2)Young people doesn't know how to save and be frugal. They just take these things for granted. Everything's going to a whirlpool of disaster i'm telling you!

  2. Well all is not lost...not yet. Like us, young people will survive. What they choose to do today will determine how they go about doing that.

    Of course, I am an incurable optimist and alway have been. And I do believe that how good things are is all about what is going on in "the six inches between my ears."

    Have a wonderful day.



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