is one of a number of steps participants can take to improve their readiness
for retirement and increase their confidence in their ability to make financial
decisions. Robert Reynolds, Putnam’s chief executive, pointed out that lifetime
income is only partly about actual income.
401(k) plan participant scores the same as people with household incomes of
$175,000,” Reynolds said at a Putnam forum, “Health, Wealth and the Future of
Retirement.” Reynolds called the rapidly rising poverty of senior Americans and
the projected shortfall in Social Security trust funds “deeply disappointing
have to have healthy public systems, of course, and very healthy private
systems,” Reynolds said.
company’s survey of nearly 4,000 working Americans indicates that a critical
factor in retirement readiness continues to be savings behavior. The
best-prepared are active participants in a workplace savings plan, deferring at
least 10% of income and using the services of a financial adviser. These workers
indicated higher confidence in their ability to make financial decisions.
decision to work with an adviser also had a material impact on Lifetime Income
Scores, Reynolds said. Those who worked with an adviser had scores of 89 this
year (a rise from last year’s score of 82), while those who did not work with
an adviser scored 58 (a drop from last year’s score of 61).
research examined behavioral tendencies, mortality factors, retirement and
non-retirement assets, such as home equity, investment securities, annuities
and cash value life insurance, to estimate the level of income that U.S.
households are currently on track to replace in retirement.