The Fidelity Research Institute reported March 12 that Americans are slightly better prepared for retirement, but noted that their expectations for income in retirement remain highly unrealistic. The Institute’s third annual Retirement Index showed that the typical American working household is on track to replace 58% of its income in retirement–a slight increase from the 57% level reported in 2006. Among other interesting developments from the online survey of 2,000 working financial decision-makers and nearly 800 retirees, conducted in January 2007, is that 60% of pre-retirees plan on working in retirement to make up their income shortfall. However, 22% of the retirees surveyed reported they were forced to retire early because of poor health. Also among retirees, 39% reported they are actually spending more in retirement than they did just prior to retirement. . .
The American College announced today that New York Life Insurance Company is donating $2 million to establish the New York Life Center for Retirement Income at the College, which will provide funding to support continuing education, the creation of an annual guide for retirement planners, and continuing research on the subject of the retirement income needs of Americans. The Center will also host a professor of Retirement and Finance and a doctoral fellow. . .
John Hancock has formed a new business unit to focus on retirement income, called Retirement Income and Rollover Solutions, headed by David Longritz, the former top marketing executive at John Hancock Annuities. . .
The chairman of the House Education and Labor Committee, Rep. George Miller (D-CA), opened committee hearings into the fees associated with 401(k) plans by pledging to insure that workers with 401(k)s are getting the “best bang for their buck.” . . .
Nationwide Financial said that passage of the 2006 Pension Protection Act has spurred popularity of the Roth 401(k) in terms of both the number of retirement plans that offer Roth 401(k)s as an option, and in the assets in the plans. Nationwide said that 6,400 participants in 2,600 plans had placed $18.5 million in its Roth 401(k)s since the option became available in January 2006.