BMO Harris Premier Services: More than Half of Americans Do Not Know How Much Money They Will Need for Retirement
Nearly half do not know when they will retire
- Forty-three percent of Americans have put some thought into their retirement and 38 percent have not thought about it at all
- Ninety-three percent of retirees recommend younger Americans contribute to a 401(k)/IRA
September 1, 2015 – BMO Harris Premier Services today released the results of a study that examined retired and non-retired Americans’ views on retirement. According to the study 75 per cent of non-retirees under the age of 60 are taking steps to save for retirement through a 401(k) or IRA account.
The study also found that:
- Fifty-seven percent do not know how much they will need to fund their ideal retirement lifestyle and 44 percent do not know when they will retire.
- The average age for non-retirees to start saving for retirement is 28.
- Forty-three percent of Americans have put some thought into what their retirement will look like, but only 19 percent have a definite idea and 38 percent have not thought about it at all.
When asked what younger Americans plan to do once in retirement, 56 percent said they plan to spend their golden years relaxing and spending time with friends and family (50 percent), whereas 46 percent would like to travel. Other plans included focusing on hobbies (39 percent) and working in retirement (30 percent) – whether it be part-time in their current career (20 percent) or starting a new business (9 percent).
“It’s encouraging to see that Americans are proactively saving for retirement,” said Mike Miroballi, President, BMO Harris Financial Advisors. “However, it’s also important to give some thought to how you want to spend your retirement to determine exactly how much you’ll need to fund your desired lifestyle.”
Mr. Miroballi noted that there is no defined amount Americans should be trying to set aside for retirement. “Sit down with a financial advisor and have a thoughtful discussion on what you want your retirement to look like. They can help you develop a financial plan that includes a retirement component.”
Lessons Learned: Retirees Look Back
The study also polled current American retirees on what challenges they have faced in retirement. It found that although 86 percent are satisfied with their retirement lifestyle, 14 percent are unsatisfied with some lifestyle aspects. Among those unsatisfied retirees, 83 percent cited lack of funds and health issues (37 percent) as their top challenges in retirement.
When asked what financial wisdom they would pass down to younger Americans, retirees recommended:
- Opening a 401(k) and/or IRA account as soon as possible and making regular contributions (93 percent).
- Talking to their partner to ensure they both are on the same page with what they want to do in retirement (91 percent).
- Making it a priority to pay off their mortgage faster (79 percent).
“We’re seeing that today’s retirees are satisfied with their retirement lifestyle – what they have learned with the retirement planning process can serve as a model for future generations as they plan for their golden years,” said Stuart Thompson, Head, Premier Banking Strategy and Segment Management, BMO Harris Bank. “The notion of an ‘ideal retirement’ changes with each generation and proper financial planning is vital to achieving your desired retirement lifestyle.”
*Survey results cited in this report conducted by Pollara, are from online interviews with an online sample of 3,163 Americans 18 years of age and older, conducted between January 16th and 21st, 2015. As a guideline, a probability sample of this size would yield results accurate to ±1.7%, 19 times out of 20. Data has been weighted by region, gender, and age, based on the most recent Census figures, so that it is representative of all adult Americans.
About BMO Harris Premier Services BMO Harris Premier Services represents a combined service approach of BMO Harris Financial Advisors and BMO Harris Bank, each a part of the BMO Financial Group. BMO Harris® is a trade name used by BMO Harris Bank N.A. and its affiliates. BMO Harris Premier Services includes banking deposit and loan products and services provided by BMO Harris Bank N.A. Banking products and services are subject to bank and credit approval. BMO Harris Bank® is a trade name used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank does not provide legal or tax advice.
About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris Bank® is a trade name used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $672 billion in assets (as of July 31, 2015).
About BMO Harris Financial Advisors
BMO Harris Financial Advisors, Inc., offers a comprehensive range of investment advisory products that include financial planning strategies and estate planning strategies, insurance and brokerage products and services, to meet the financial needs of mass affluent clients. Offices are located throughout the U.S. Learn more at www.bmohar
Securities, investment advisory services and insurance products are offered through BMO Harris Financial Advisors, Inc. Member FINRA/SIPC. SEC-registered investment adviser. BMO Harris Financial Advisors, Inc. and BMO Harris Bank N.A. are affiliated companies. Securities and insurance products offered are: NOT FDIC INSURED - NOT BANK GUARANTEED - NOT A DEPOSIT - MAY LOSE VALUE