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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

4 Ways Americans Are Screwing Up Their Retirements

NEW YORK ( TheStreet) -- U.S. workers, by and large, are an optimistic lot, choosing to see their coffee cup half-full rather than half-empty.

Sure, a soft economy and a sputtering job market have triggered concern, but ask an individual worker and chances are he or she will say the future will be better than the present and good times are just around the corner.

That optimism is also present when you ask U.S. adults about their finances, although data suggest that optimism may be moderately misplaced.

According to a study from Boston-based Natixis Global Asset Management, Americans "are optimistic" their money situation will improve by next year. And the vast majority of U.S. adults, as measured by the survey, say their retirement plans are on track to yield a good income in retirement.

A closer look at the data says that is just not so.

In fact, in many ways Americans may be getting in their own way on the path to a decent retirement. The Natixis study reveals four glaring (and not so glaring) omissions or mistakes being made with retirement plans:

No plan. Despite an overwhelming sense that their financial futures are in order, less than half of all American workers have a financial plan for retirement. All told, 54% of Americans don't have one, and another 45% don't have clear financial goals, according to Natixis.

Rose-colored glasses. The survey adds that even those workers with a financial plan may be "significantly underestimating the amount they will need in retirement." Natixis reports that most Americans say they will need 62% of their current yearly income to retire comfortably, even though firm analysts say 80% is a "commonly used" retirement income target by financial advisers.

Health care dichotomy. This one is more of a gray area, but Americans seem to be underestimating the impact of their health on their long-term finances. According to the survey, Americans say they will need five years worth of long-term care savings, yet 40% of Americans say LTC costs "not covered by insurance" are their largest financial roadblock in retirement.

Not hitting the asset allocation mark. While 83% of U.S. investors say they want to find the right balance between safety and performance with their retirement savings, 65% say they "cannot decide" how to cover both issues. "This is particularly an issue for investors who are nearing retirement because interest rates on their savings accounts aren't generating enough income and they are reluctant to invest because volatility in the market presents more risk than they can bear," says John T. Hailer, chief executive of Natixis.

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 17,834.66 +24.60 0.14%
S&P 500 2,067.70 +4.20 0.20%
NASDAQ 4,738.9920 +26.0220 0.55%

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