Americans are on track to replace about 61% of their income in retirement, according to a Putnam survey released Thursday. The survey found that people most likely to succeed are doing three things: participating in a workplace plan, saving at least 10% of their income and working with an advisor.
In fact, households deferring at least 10% of their income to a retirement savings plan are on track to replace 106% of their preretirement income, according to Putnam. Higher income isn’t necessarily a factor in retirement success either; 15% of households with income under $50,000 are on track to replace 100% of their income.
“As awareness grows among working Americans that a financially successful retirement may require greater savings discipline, we think a solid understanding of the various factors at play could positively raise their chances of replacing current income in retirement,” Edmund Murphy, head of defined contribution for Putnam Investments, said in a statement. “In dissecting the survey’s rich pool of data, one variable rises above all others—the level of individual savings is clearly the key driver of future retirement success.”
Access to a workplace plan had a significant impact on replacement income. Eligible workers are on track to replace 73% of their income, compared with 41% for workers without access to a plan. Eligible workers who are actually participating could replace 79% of their income.