Tags: procrastinate | 68% | retirement | savings

Survey: 68 Percent of Those 55 or Older Admit to Delaying Retirement Planning

By    |   Friday, 17 April 2015 09:49 AM

Here's yet another study showing we aren't minding our Ps and Qs when it comes to retirement planning.

A survey of Americans 55 or older by Financial Engines, an investment advisory firm, found that 68 percent admit to procrastinating on retirement planning.

Respondents on average said 25 is the right age to start retirement planning. But on average they waited another 10 years beyond that.

The study listed the top five reasons respondents cited for procrastination:
  • Stress (mentioned by 50 percent of respondents)
  • Higher priorities (40 percent)
  • Worried about being taken advantage of (24 percent)
  • Unsure how to go about it (23 percent)
  • Too difficult (20 percent)
And how much will procrastination cost you?

Under a typical scenario, "savers starting at age 35 would have to save 11.69 percent of their salary to catch up to a 25 year old saving 6 percent of salary," the study states. "A saver starting at age 40 would need to save 16.44 percent to have the same amount at age 65."

Here's some more bad news on the retirement front. The aggregate funded status for the largest 100 pension programs among publicly traded companies dropped to 81 percent as of Dec. 31, 2014 from 89 percent a year earlier, according to a study from consulting firm Towers Watson.

With the funds' obligations standing at $1.3 trillion last year, compared with assets of $1.1 trillion, the funds faced an aggregate deficit of $248 billion.

"While plan assets gained value, falling interest rates coupled with updated mortality assumptions [which reflect increased life expectancy rates] significantly increased liabilities, thus wiping out most of the previous year’s gains," the study states. "Sponsors are not yet out of the funding hole dug by the 2008 financial crisis."

Meanwhile, many plan sponsors have cut their investment risk over the past five years by gradually shifting asset allocations from stocks to bonds and alternative investments, the study says.

To be sure, some would question whether alternative investments, which include hedge funds, private equity and real estate, lower investment risk or increase it.

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Here's yet another study showing we aren't minding our Ps and Qs when it comes to retirement planning.
procrastinate, 68%, retirement, savings
Friday, 17 April 2015 09:49 AM
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