Ninety percent of American workers find retirement income projections either somewhat or very helpful, according to a new study by the LIMRA Secure Retirement Institute, which also revealed concerns from employees about the methodology of the calculations.
Some 45% of workers in the survey who found retirement income estimates less than very helpful say they did not understand the calculations behind the projections or were not confident in their accuracy, according to LIMRA, which released the results on Wednesday.
Providing an estimate of what their monthly income will be in retirement has been well received by most U.S. workers, says Alison Salka, corporate vice president and research director for the LIMRA SRI. The study suggests that workers are interested in a clear explanation of how the estimates were calculated and need additional information to provide context to the projections.
Two out of every five of LIMRAs 2,024 respondents say the information was too hypothetical; another 17% say the projections didnt capture all of their retirement savings.
Many consumers do not have a good idea what their currently monthly income or expenses are a prior SRI study found that nearly a quarter felt they needed help with basic budgeting skills, Salka says. This coupled with unknowns like inflation and taxes can make any retirement projections seem abstract.
Approximately half of U.S. employees have seen a monthly retirement income projection. Men and workers making $75,000 or more are more likely to have seen such a projection. Employees contributing to a defined contribution retirement plan are nearly twice as likely as those not contributing to such a plan (67% vs. 35%) to have seen a retirement income projection.
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