Post by Editor on Jan 17, 2007 14:10:59 GMT -5
Your Retirement Challenge: Are Your Retirement Savings Sufficient?
Submitted by Henry-Stark Extension
A recent research report from University of Wisconsin professor, Robert Haveman, and his co-authors sheds light on the sufficiency of savings for retirement among Americans. Haveman and his team examined data from two unique data sets (the New Beneficiary Survey and the Health and Retirement Survey) to calculate the sum of all retirement resources available to a cohort of newly retired people in 1980-81 and another cohort in the early 1990s. From the data on retirement resources (savings, pensions, social security payments, and housing wealth) they constructed a measure of annuitized net wealth at the date of retirement. Their analysis shows that while the mean annuitized net wealth has increased over the ten years from 1981 to the early 1990s (after taking into account inflation), a greater percentage of the retirees in the early 1990s group failed to have a level of retirement resources necessary to lift them over the poverty threshold.
Moreover, the results from the early 1990s show that 23 percent of all households do not have enough wealth, even taking into account social security payments, sufficient to live at twice the poverty standard. While many new retirees at the top end of the income distribution enjoy a high standard of living, plenty of people that retired in early 1990s have less than they would like to live on in retirement. The report is titled “The Sufficiency of Retirement Savings: A Comparison of Two Cohorts of Retired Workers at the Time of Retirement.”
This research is from data that is more than 10 years old and the financial resources available to future retirees may be very different now because of the increased reliance on individual-driven retirement plans such as 401(k) and 403(b) plans and IRAs. However, the important point is that without planning and careful financial management, many people may not have enough money to retire comfortably.
Are you taking the steps needed to ensure that your retirement savings will be sufficient to last through your later years? You can learn about retirement investing and saving at Plan Well, Retire Well: Your How-to Guide, a University of Illinois Extension financial education website. At Plan Well, Retire Well you will learn about setting goals, saving on the job in plans like a 401(k) or 403(b) retirement plan, as well as other savings plans like IRAs. The site also explains money terminology and presents the basics of savings and investing principles. Come increase your knowledge and comfort in the area of investing for your retirement at www.retirewell.uiuc.edu.
Source: Paul McNamara
Associate Professor and Extension Specialist
Department of Agricultural and Consumer Economics
University of Illinois
217-333-3769
Submitted by Henry-Stark Extension
A recent research report from University of Wisconsin professor, Robert Haveman, and his co-authors sheds light on the sufficiency of savings for retirement among Americans. Haveman and his team examined data from two unique data sets (the New Beneficiary Survey and the Health and Retirement Survey) to calculate the sum of all retirement resources available to a cohort of newly retired people in 1980-81 and another cohort in the early 1990s. From the data on retirement resources (savings, pensions, social security payments, and housing wealth) they constructed a measure of annuitized net wealth at the date of retirement. Their analysis shows that while the mean annuitized net wealth has increased over the ten years from 1981 to the early 1990s (after taking into account inflation), a greater percentage of the retirees in the early 1990s group failed to have a level of retirement resources necessary to lift them over the poverty threshold.
Moreover, the results from the early 1990s show that 23 percent of all households do not have enough wealth, even taking into account social security payments, sufficient to live at twice the poverty standard. While many new retirees at the top end of the income distribution enjoy a high standard of living, plenty of people that retired in early 1990s have less than they would like to live on in retirement. The report is titled “The Sufficiency of Retirement Savings: A Comparison of Two Cohorts of Retired Workers at the Time of Retirement.”
This research is from data that is more than 10 years old and the financial resources available to future retirees may be very different now because of the increased reliance on individual-driven retirement plans such as 401(k) and 403(b) plans and IRAs. However, the important point is that without planning and careful financial management, many people may not have enough money to retire comfortably.
Are you taking the steps needed to ensure that your retirement savings will be sufficient to last through your later years? You can learn about retirement investing and saving at Plan Well, Retire Well: Your How-to Guide, a University of Illinois Extension financial education website. At Plan Well, Retire Well you will learn about setting goals, saving on the job in plans like a 401(k) or 403(b) retirement plan, as well as other savings plans like IRAs. The site also explains money terminology and presents the basics of savings and investing principles. Come increase your knowledge and comfort in the area of investing for your retirement at www.retirewell.uiuc.edu.
Source: Paul McNamara
Associate Professor and Extension Specialist
Department of Agricultural and Consumer Economics
University of Illinois
217-333-3769