September 19, 2012 (PLANSPONSOR.com) – American workers are not saving close to enough for retirement—and risk the regret felt by current retirees who made that same mistake, according to research from BlackRock.
When BlackRock surveyed 1,035 retirees and 1,002 workers in March about key attitudes and behaviors around retirement, the polls revealed that, in many ways, the reality of retired life is beating expectations and that, for many retirees, long-term participation in a defined contribution (DC) plan such as a 401(k) helps sustain critical aspects of retirement security and satisfaction.
Nearly six in 10 workers (58%) currently are not saving the maximum amount of money permitted by their 401(k) plan. At the same time, nearly three in 10 retirees (27%) agree they did not save as much in their plan as they could have—and nearly eight in 10 of them regret it.
Long-term participation in a DC plan can significantly affect retirement savings, the BlackRock poll shows. Among retirees, those who spent more than 20 years in the DC system are more likely than those with less time (five to 10 years) to say that they saved the amount of money permitted annually by their plan (79% versus 62%). “The positive impact that DC has on retirement saving builds over time,” said Chip Castille, managing director and head of BlackRock’s US & Canada Defined Contribution Group. “We need to get workers into the DC system as soon as possible and maintain their maximum participation throughout their working years.”