Jeanette A. Tucker | 10/28/2005 8:36:28 PM
Do you know how much money you need to save for retirement? According to the 2005 Retirement Confidence Survey (RCS), only about four in 10 workers surveyed have tried to determine how much they will need to save for a comfortable retirement.
LSU AgCenter research suggests that members of the baby boom generation who perform a retirement savings calculation obtain positive results, including more retirement savings, more retirement income from personal savings or money invested in a savings plan at work, less dependence on retirement income from employment, family members or Social Security and less dependence on post-retirement employment income to make ends meet, buy extras or keep employee benefits.
LSU AgCenter family economics professor Dr. Jeanette Tucker says that Americans trying to estimate how much they need to save for a comfortable retirement now have an updated and easy-to-use calculation tool available, the "Ballpark E$timate." The updated program is available in two formats. One is an online version that is interactive and provides instant results. The other is a printed version that can be downloaded from the Internet and filled out at home.
Both versions are sponsored by ChoosetoSave.org and the American Savings Education Council (ASEC), programs of the nonpartisan Employee Benefits Research Institute (EBRI). They are available free on the Web at www.choosetosave.org. The Ballpark E$timate has been repeatedly cited as a simple and useful tool for quickly estimating overall retirement savings needs.
Tucker says both the online and paper versions of the Ballpark come with instructions that take complicated issues, such as projected Social Security benefits and earnings assumptions on savings, and turn them into language and mathematics that are easy to understand.
The updated online version allows individuals to customize several key factors in calculating how much they need to save for retirement, how long they think they will live, when they expect to retire and other variables. Since each individual is different, it allows people to achieve a more accurate estimate based on their particular circumstances.
"As people continue to live longer, and as savings for retirement becomes more and more of a personal responsibility issue for all Americans, it is important that savings calculators take full advantage of what we know and the technology that is now available," said Dallas Salsbury, EBRI president, adding, "While the amount that people need to save may be shocking to them, it is better that they have a realistic Ballpark E$timate so they can get started."
Most Americans currently are not saving enough to achieve their retirement goals, Tucker notes. A 20 year old who starts saving now, in anticipation of retiring at age 62, would have to set aside more than most Americans now save. If that person waits until age 40 to start saving, the amount to be set aside becomes astronomical.
EBRI’s 2005 Retirement Confidence Survey (http://www.ebri.org/surveys/rcs/2005 ) echoed LSU AgCenter research findings by showing that conducting a retirement savings calculation can change savings behavior.
Most often, those who make the calculation report that they start saving more, and they take other steps, such as changing the investment allocation of their retirement savings, researching other savings methods, reducing debt and opening a new savings account.
For information on related family economics topics, click on the links at the LSU AgCenter home page at www.lsuagcenter.com. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.
On the Internet: LSU AgCenter: www.lsuagcenter.com/
Contact: Jeanette Tucker (225) 578-5398, or Jtucker@agcenter.lsu.edu