Retirement Savings Know-How Spurs Behavior Change

retirement1Figuring out how much money should be saved for retirement often spurs people to change their retirement planning behavior, which can help boost retirement confidence.

In fact, in a 2008 Retirement Confidence Survey conducted by the Employee Benefit Research Institute (EBRI), 44 percent of workers who calculated a retirement goal reported having made changes to their retirement planning as a result. Most began saving or investing more (59 percent). Other actions reported include:

  • Changing their investment mix (20 percent)
  • Reducing debt or spending (7 percent)
  • Enrolling in a retirement savings plan at work (5 percent)
  • Deciding to work longer (3 percent)
  • Researching other ways to save for retirement (3 percent)

Despite these trends, too many workers still approach retirement savings as a guessing game. As reported by the Washington Post’s Michelle Singletary, EBRI’s 2010 Retirement Confidence Survey reveals that less than half (46 percent) of workers have tried to calculate how much money they will need to live comfortably. The report also shows that the number of workers who have been saving for retirement decreased by 6 percent from 2009.

EBRI’s findings provide evidence that offering education around retirement savings is a must for employers and other organizations that communicate with employees. Emphasizing the importance of participating in employer-based retirement programs and other savings plans is particularly important among young employees who have the greatest opportunities to save at less cost per year than someone mid-way through their career.

Various online retirement calculators – like the ones found on ChoosetoSave.orgKiplingers.com and Schwab.com – provide employees with simple ways to determine their savings goals. Additionally, the U.S. Department of Labor’s Retirement Savings Education Campaign is a great resource for employees, small businesses and employers looking for information about retirement savings and tools to get started.

View EBRI’s full report here.

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