NU Online News Service, May 24, 2004, 5:22 p.m. EDT – Many U.S. residents say they will have to work well into their 70s just to stay afloat. And that’s the good news.[@@]
When researchers with John Hancock Financial Services Inc., Boston, surveyed 800 defined contribution plan participants earlier this year, they found that the average expected retirement age had soared to 64.4, from 60 in 1995.
About 18% of the 2004 participants believe they will have to work until they are at least 70. That percentage is 2 times what it was in 2002 and 3 times what it was in 1995, Hancock researchers report.
The percentage of plan members who fear they may not have enough money to live comfortably in retirement has jumped to 70%, from 59% in 2002.
But, on the bright side, defined contribution plan participants may be starting to get a realistic idea of how little they know about retirement planning, according to Wayne Gates, Hancock’s general director of market research and development.
Only half of the defined contribution plan members have calculated how much money they would need in retirement, and only half have ever made any changes in their 401(k) investment contributions or asset allocations. Fewer than half spend more than 20 minutes a month planning for retirement or managing investments.
Moreover, fewer than 40% of the plan participants know that they can lose money by investing in a government bond fund, Hancock researchers report.