If you’re like most Americans, chances are you’re starting to become more concerned with your savings for the future. An increasing amount of people are re-evaluating their retirement plans and steps needed to secure their children’s college education.
According to an August study conducted for Bank of America, those with $50,000-$250,000 in investable assets don’t believe they’ve saved enough for retirement and more than half of them, 56 percent, plan to retire later then they thought they would at the same time last year.
Half, or 52 percent, have saved less than $250,000 for retirement and 60 percent plan to retire on only their personal savings and programs such as Social Security or Medicare.
“People understand they don’t have the money they did five years ago and it’s going to cost them more going forward, so they aren’t as likely to retire,” said Lawrence S. Wagner, vice president and financial consultant in the investment-management group at Rockland Trust in Providence. “The Gen Xers [those born in the early 1960s to the early 1980s] and older, if they haven’t kept up with the rate of their advanced earnings, they certainly are taking steps to work a little longer.”
Part of the problem, said Wagner, is that many investors lost a lot of retirement savings in the 2008 recession, causing a disruption of savings and a fear of the stock market. To make matters worse, some moved their savings to money market or CD accounts only to see the stock market steadily advance. “They lost a chance to recoup even part of it,” he said.
But people are again becoming more aware of their investment options, he says.
“We see people setting a good asset allocation based on their risk tolerance and they’re becoming more confident, letting that allocation ride and rebalance when the market sees disruptions,” Wagner said. “As for Generation Y [born from the mid-1980s to the early 2000s], they are showing a great interest in their long-term savings, we see that here.”