Sunday, April 4, 2010

Retirement Plans of Many Baby Boomers Are at Least $250,000 Short

If you are worried about retirement you are not alone. A recent survey out shows that Americans are increasingly ill-prepared for retirement. Workers are delaying their planned career end dates to instead focus on building a nest egg of some type.

Even using Simple Retirement Calculators will show that most people need a retirement job to create more retirement income.

According to

“The percentage of workers who said they have less than $10,000 in savings grew to 43% in 2010, from 39% in 2009, according to the Employee Benefit Research Institute’s annual Retirement Confidence Survey.

That excludes the value of primary houses and defined-benefit pension plans."

Workers who said they had less than $1,000 jumped to 27%, from 20% in 2009."

The survey found that 54 percent of American workers with some form of retirement savings have less than $25,000 stowed away and need to spend more time retirement

    Low Balances In Retirement Funds

Only about half the U.S. workforce is covered by some type of employer-sponsored retirement plan. And most of those are 401(k) plans, which usually require employees to contribute and make investment decisions.

Even before the financial crisis, the average balance in 401(k)s for workers nearing retirement was just $78,000. After the market plunged, that average was reduced to about $56,000. That's just not enough for a comfortable retirement, says Roger W. Ferguson Jr., president and chief executive officer of TIAA-CREF, the financial services company that offers retirement plans for employees in the academic, medical and nonprofit fields.

"Many families, at this stage, are short $250,000 from what they're going to need," Ferguson says.

Check out Why My Retirement Plan Is Better than David Letterman's Retirement Plan.