ING U.S. has launched a Web-based benchmarking tool to help consumers score their retirement preparedness. ING My Savings Score uses consumers’ age, annual salary and current retirement savings to determine the score, which is their savings as a multiple of their annual income.
The tool also gives a target score as a reference point for how much they should have saved so far.
“Many people today realize they should be doing more to prepare for their retirement,” Maliz Beams, CEO of ING U.S. Retirement Solutions, said in a statement. “At the same time, they’re feeling overwhelmed, lacking confidence and looking for help. This includes help from simple, self-service tools and resources that can get them started.”
The benchmark is based on a retirement age of 67with pre-tax savings to provide income for 23 years at a 50 percent wage replacement rate; current income with a 3 percent annual increase; 26 pay periods per year with a 10 percent contribution to a tax-deferred retirement account each pay period; an annual inflation rate of 3 percent both pre- and post-retirement; and a hypothetical investment rate of return of 6 percent pre-retirement and 4 percent in retirement. The savings factor does not include any amounts individuals may be eligible for from Social Security or other retirement benefits.
Another tool that emphasizes the importance of saving is ING’s State of Savings map, which shows the savings progress for each state, as well as the overall score. For the nation as a whole, ING found Americans had saved 39 percent of what they’ll need for retirement and an average of 2.42 times their annual income.
The data used for State of Savings map was taken from ING’s CompareMe tool, where consumers create a profile of their age, income, gender and marital status, then answer questions about their saving, spending and investing habits, their debt and their financial planning.
The launch coincides with America Saves Week, which began Monday and runs through March 2.