Basics are Needed.
Summary paragraph: Few have figured out their retirement goals
Only 52% of individuals participating in defined contribution (DC) retirement savings plans believe they are "on track" for retirement, but BlackRock says retirement confidence is within reach for many more.
The 2016 BlackRock DC Pulse Survey of 1,003 defined contribution plan participants found that 28% say they are "unsure" about whether they are on track for retirement. The survey revealed that people unsure about their retirement prospects are much more likely than those on track to admit that "I don't know as much as I should about investing for my retirement" (66% vs. 38%, respectively), and "I don't know how much money I need to save in order to fund the retirement I want" (68% vs. 32%, respectively).
Unsure participants also are less likely to be taking proactive steps to improve their knowledge. For example, just 11% of those unsure have calculated the amount of money to set aside now for retirement, compared with 35% of those on track. Similarly, just 25% of unsure individuals have developed a good sense of how to generate ongoing retirement income from their savings, vs. 68% of people on track.
According to BlackRock's analysis, the link between a basic understanding of key retirement planning principles and retirement confidence holds true for people at all income levels-suggesting that such confidence is not simply a function of greater financial resources.
"Unfortunately, many individuals who consider themselves 'off track' face financial realities requiring support beyond their DC plan," says Anne Ackerley, head of BlackRock's U.S. and Canada defined contribution group. "But the good news is that people who are unsure about their retirement standing may be able to build their confidence with relative ease by working in the near term to close critical knowledge and saving gaps."
The survey also found that, across the board, unsure individuals are less likely than on-track participants to engage with their DC plan. Those unsure were less likely than those on track to say they take full advantage of retirement savings guidance (43% vs. 67%, respectively) and also less likely to have increased their contribution in the past 12 months (35% vs. 47%, respectively).