If retirees could talk to their younger selves, it would tell them to save more for their golden years.
Nate Miles, head of retirement at Allspring, told Yahoo Finance Live about the company’s latest release World Investment Survey of 2,758 adults who are close and retired.
As a result, many Allspring respondents are considering semi-retired retirement.
“About 25% of them are resigned to either working later and retiring later and/or expecting to retire less,” Miles said.
But this isn’t always a viable option, according to the survey results. 1 in 4 early retirees took an unexpected early retirement due to job loss and health issues.
Instead, Miles said, workers should focus on saving.
It recommends that workers save at least 10% of their income for retirement. Workers can make up for lost time, however, if they start saving for retirement later in their careers. It just means constantly getting rid of more.
“One of the things that actually worried us about the survey is that people who didn’t start saving until after age 40 were only saving 50% of the time, at about a 10% rate,” Miles said. “Even when people save for later, they don’t really make up for those 10 or 20 years in terms of the delayed start date.”
Employers can also play a role in helping workers achieve their retirement goals through automatic enrollment plans. That’s when workers are automatically enrolled in their company’s 401(k) when they start out. Some employers also offer automatic contribution increases each year.
Studies have found that employers with self-enrollment retirement plans have significantly higher rates of participation among their employees.
“For the majority of participants, they either lack the involvement or the financial knowledge to often make the decision that is best for them. So things like auto-enrolment and auto-escalation are going to help solve some of these issues for them.” And we’re seeing more and more plans add that. with a recent death secure 2.0, We expect that more participants in employer-sponsored plans will do so.”
Miles said that automatic enrollment can also help women, who feel more anxious about achieving their retirement goals. An Allspring survey found just that 69% of women are confident about their savings that last into retirement compared to 87% of men.
“Overall, women are less confident in retirement and more anxious in general. Part of that is because they’re often not in the workforce their whole career, and so they don’t take advantage of that time savings,” Miles said. [auto-enrollment plans] It’s really going to help, as we’re going to get more and more women in the workforce to actually save to retire longer.”
Ella Vincent is the Personal Finance Correspondent at Yahoo Finance. Follow her on Twitter @employee
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