2010 Retirement News for Massachusetts Clients
Many of our clients are worried about their retirement, their 401k accounts, and, of course, what to do about future investing. They are not alone. In a study undertaken by Wells Fargo, it was shown that workers are not saving sufficiently. Notwithstanding the significant loss of value of retirement accounts following the “crash” in 2008, according to their survey, only 23% of workers are saving more than they were a year ago, 57% are saving the same amount and 20% are saving less. On the other hand, 56% of pre-retirees are planning to work more years.
The survey indicated that most workers have allowed their assets to remain in the stock market; only 15% actually removed monies from the market, while 10% plan to increase their allocation of monies to equities.
The most concerning portion of the survey was that folks expected to be “in” retirement for 21 years, yet planned to take 10% of their retirement savings per year. What if they live longer? Further, at that rate, the savings would be depleted within approximately six (6) years. Ten percent greatly exceeds the 4% to 5% which most financial planners, including Charles Schwab & Company recommend.