April 18, 2012 (PLANSPONSOR.com) - American households may experience a potential income drop of 28% in retirement.
Nearly four in 10 retiree households (38%) report not having sufficient income to cover their monthly expenses, according to Fidelity Investments Retirement Savings Assessment. These estimated retirement income gaps could force significant sacrifices that could include cuts in discretionary expenses.
To help improve Americans’ retirement readiness, Fidelity conducted an analysis that quantifies the potential monetary benefits of five straightforward steps—such as adjusting asset allocation and annuitizing retirement assets. In the context of a comprehensive retirement plan, this analysis can help individuals better understand which steps may make the greatest impact.
“While there is evidence that Americans are saving more for retirement, our analysis finds that they need to take additional steps to prepare for the future and take better control of their personal economy,” said Kathleen A. Murphy, president, Personal Investing, Fidelity Investments. “The study underscores the importance of early engagement in the retirement planning process and the potential impact these five actionable steps can have in helping address the retirement income gap that many Americans are facing today.”