A new survey shows only 13 percent of workers are very confident they'll have enough money to retire comfortably. The survey, by the nonpartisan Employee Benefit Research Institute, also shows many misconceptions still exist about retirement. Those include how much money will be needed and where the money comes from.
Here are some retirement facts:
- Most workers in the U.S. today do not have a defined benefit plan. These plans, commonly called pensions, were common in previous generations of workers. Companies paid into these pensions and workers did not have to contribute. They have largely been replaced by defined contribution plans, which include 401(k) plans. Employees typically contribute the largest share to these plans frequently with some company match.
The U.S. Bureau of Labor Statistics says just 20 percent of workers in private industry today have a defined benefit plan, or pension. About 43 percent have defined contribution plans.
- Many people do not know how much money they need for retirement and large numbers of workers don't have enough saved to live comfortably.
A woman earning $40,000 at retirement would need to have $203,134 in savings by age 65 to ensure she could replace 80 percent of her income in retirement, according to EBRI calculations. This assumes she has purchased an annuity with a nominal guaranteed income and receives Social Security. A man under the same circumstances would need $190,138.
- Few people have actually calculated how much they need to retire comfortably. The Internet has many calculators that can help determine how much you will need to replace your income at retirement to live a comparable lifestyle.
One such calculator is available at the Web site for the Financial Industry Regulatory Authority Inc.
- Another option can be found at the AARP Web site.
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