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Are You Saving Enough For Your Golden Years?
Find Out With A New Online Tool
By Suzanne Martin
If you’re afraid you’ll be scavenging for pennies during your retirement years,
you’re not alone.
The 2008 Retirement Confidence Survey (RCS) conducted
by the nonpartisan Employee Benefit Research Institute (EBRI) told a scary
story. It found that:
- The percentage of workers who are very confident about having enough money
for a comfortable retirement decreased sharply, from 27 percent in 2007 to 18
percent in 2008, the biggest one-year drop in the 18-year history of the RCS.
- Older workers tend to have saved more than younger workers, but overall
savings levels tend to be modest. Forty-nine percent of workers report less than
$25,000 in total savings and investments (excluding their homes and any
pensions).
But that’s just part of the story.
On a positive
note, the survey found that about half of workers (47 percent) say they have
tried to calculate how much money they’ll need for a comfortable retirement.
And the survey revealed that doing a retirement savings calculation is
particularly effective at changing savings behavior: Forty-four percent who
calculated a goal changed their retirement planning, and of those almost
two-thirds (59 percent) started saving or investing more.
The moral of
the whole story? Figure out how much you need to save for those golden years.
It’s easier than you think with a new online tool from the Employee Benefits
Security Administration (EBSA).
EBSA, part of the U.S. Department of
Labor, now offers an online version of its guide “Taking the Mystery Out of
Retirement Planning.” EBSA published the 62-page guide several years ago. It
included a number of worksheets to help users calculate how much they needed to
save for retirement. Now those interactive worksheets are available at the EBSA
Web site.
You simply fill in figures for your assets, savings and
investments, and then let the computers at the Department of Labor handle the
heavy lifting.
The worksheets ask you for information such as:
- Age at which you expect to retire
- Current dollar amounts in retirement, savings and investment accounts
- Amounts you’re saving each month in different accounts
- Expected Social Security and pension benefits at retirement
- Current home value
- Current home mortgage
With that and other information you provide,
the system calculates your post-retirement assets and gives you an estimated
monthly income for your retirement years. You then complete an expenses
worksheet and presto! You can see the anticipated financial status for your
retirement years.
The Web site offers explanations and guidance
throughout the process. It also lets you change assumptions such as the rate of
return on your savings and investments.
Best of all, you can store your
data and change your numbers. Simply register at the site with a user name and
password; no other identifying information is requested.
If you’ve been
intimated by other online retirement calculators, don’t let that stop you from
trying this one. It’s straightforward, and navigation is easy. If you haven’t
yet put your retirement numbers together, start here.
Whether you’re 12
months or 12 years from retirement, this resource helps make retirement planning
much less painful.
Get started at
www.dol.gov/ebsa. Click on “Publications/Reports,” then on
“Taking the Mystery Out of Retirement Planning.” From there you can go directly
to the interactive worksheets or download a PDF of the fully-illustrated 62-page
guide.