This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

How to Restore Confidence in Your Retirement Fund

Stocks in this article: AMP

NEW YORK ( TheStreet) -- Is your retirement plan losing some luster?

If so, you're hardly alone.

The Employee Benefits Research Institute estimates about half of all U.S. adults are either "not at all confident" or "not too confident" in their ability to retire comfortably.

The EBRI data say that only 18% of Americans are "very confident" about the financial stability of their retirements.

One reason is that U.S. workers have unrealistic expectations about how much money they'll need to retire and live the life they expect. Some 43% say they are targeting saving up to 30% of their annual income on a yearly basis, but that would be too low, according to most financial advisers. The expert estimate: Workers will need to save about two-thirds of their annual income for a comfortable ride through their golden years.

Another 46% of EBRI respondents say they haven't even bothered to calculate how much money they'll need for retirement, and only 2% of workers rate "saving for retirement" as their most important personal financial goal.

Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial (AMP) reached out and sent along some tips on what Americans can do to improve their confidence in retirement:

  • Expect the unexpected. The EBRI findings revealed that Americans are pushing back their retirement dates, but that this strategy doesn't always work out the way they might hope. The fact that nearly half of retirees responded they had retired earlier than planned, and 55% of those cited a health problem as the reason they couldn't continue working, illustrates that too often Americans don't get to choose when to stop working. Saving early and often and anticipating there might be bumps in the road (such as an unplanned early retirement) can make all the difference in planning for retirement.
  • Focus on health care costs. The EBRI data highlight that 29% of workers say they're not at all confident about paying for medical expenses in retirement. That's no surprise, considering all the talk about health care in Washington and rising medical expenses weighing on the minds of baby boomers. But understanding such things as what Medicare covers, the costs associated with long-term care assistance and how family medical history may affect future health care costs and decisions are important steps pre-retirees can take.
  • Crunch the numbers. About one in four (23%) Americans told EBRI they didn't know what percentage of their income they should save each year to live comfortably in retirement, de Baca says. "We also found in our own Retirement Check-In survey that 38% of pre-retirees (workers age 50 to 70) haven't even estimated what their expenses may be in retirement," she says. "Doing the math can be daunting, but beginning to do so might be more simple than what people anticipate."

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,790.84 +112.94 0.68%
S&P 500 1,961.36 +10.54 0.54%
NASDAQ 4,473.2870 +20.4950 0.46%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs