Will You Have Enough?

Saving enough for retirement, having enough in retirement and not outliving your savings. These are concerns for the investors we speak with every day. Some people are rightly nervous. Others really are on track to have a well-funded retirement that will allow them to live at peace financially and serve wherever they feel called. To give you an idea about where you are on that spectrum, here are some retirement savings statistics:

• The average 401(k) account balance for consistent participants, over the period 2003-2009, increased at an average growth rate of 10.5%:1
  • The average 401(k) retirement balance fell 27.8% in 2008 before rising 31.9% in 2009.
  • The average 401(k) account balance for consistent participants at the end of 2009 was $109,723 and the median (mid-point) balance was $59,381.
• While the percentages are still quite high, the chance of being “at risk” of running short of money in retirement has decreased for all age groups from 2003 to 2010 as follows:2
  • Early Baby Boomers (now ages 56-62): 47.2% in 2010 from 59.2% in 2003
  • Late Baby Boomers (now ages 46-55): 43.7% in 2010 from 54.7% in 2003
  • Generation Xers (now ages 36-45): 44.5% in 2010 from 57.4% in 2003
• 59% of workers have access to an employer-sponsored pension or retirement plan3 but only 45% of workers participate in any type of retirement plan.3
• In the first half of 2010, 2.1% of retirement plan participants took withdrawals and 0.9% took hardship withdrawals. In 2009, the percentages were 1.8% and 0.9%, respectively.4
• 40% of U.S. households owned IRAs in 2010. More than 75% of IRA-owning households also had an employer-sponsored retirement or pension plan. 70% of households have retirement plans through work or IRAs. Only 15 percent of U.S. households contributed to any type of IRA in tax year 2009. In addition, very few eligible households made “catch-up ” contributions to traditional IRAs or Roth IRAs.5
• 2009, Social Security benefits were 58% of total retiree income and more than 85% of income for retirees in the lowest 40% of the income distribution.5
• 46% of workers report they and/or their spouse have tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement.6
• 70% of workers plan to work for pay in retirement, but only 23% of retirees report they worked for pay in retirement.7
• Depending on the source, experts predict that you will need 65% to 85% of your gross household income today to sustain the same lifestyle after you retire.

If you're one of the rightly concerned, you can make changes starting today to get your plan for retirement on track. The decisions you make today will impact your finances in the future! Compound interest is always your best friend when saving for retirement!

As always, we’re here to provide Trusted Advice Along The Way to you. If you need any assistance, contact us at (888) 879-1376, option 1, by email , or online .

Seize the Day!

Envoy Financial
Trusted Advice Along The Way

• 1 Average 401(k) Balance Among Consistent Participants Rose Nearly 32 Percent in 2009, Employee Benefit Research Institute, 12/2010
• 2 Auto-Enrollment Helping to Reduce Those "At Risk" of Running Short of Money in Retirement, Employee Benefit Research Institute, 07/2010
• 3 Employee Participation in Retirement Plans Remain Constant, Employee Benefit Research Institute, 11/2010
• 4 Defined Contribution Plan Participants' Activities, Investment Company Institute, 2010
• 5 The Role of IRAs in U.S. Households' Saving for Retirement, 2010, Investment Company Institute, 12/2010
• 6 Have You Calculated Your Retirement Savings Needs?, Employee Benefit Research Institute, 05/2010
• 7 Working for Pay in Retirement: Expectations vs. Reality, Employee Benefit Research Institute, 04/2010