Day-to-Day Finances Detracting From Retirement Saving

October 4, 2012 (PLANSPONSOR.com) Employees are making some positive changes to their retirement planning, but poor money management skills and long-term economic challenges present major obstacles.

Financial Finesse’s second annual research report about the state of U.S. employee retirement preparedness says 32% of questions received by the company’s on-staff CERTIFIED FINANCIAL PLANNER professionals in Q2 2012 were about retirement planning issues versus 25% in Q2 2011, and a greater percentage of employees reported running retirement plan projections (39%) in the first half of 2012 versus the first half of 2011 (33%).  

However, as of June 30, 2012, 51% of employees said they did not have an emergency fund in place, and 33% reported not having a handle on their cash flow. The firm’s Think Tank believes this may be why employees are not making more dramatic improvements to their preparedness despite short-term economic improvements.   

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According to the firm’s Think Tank Director, Greg Ward, “It is also the reason that we are seeing an increase in the percentage of employees reporting that they have taken a retirement plan loan or hardship withdrawal, at 34% in the first half of 2012 versus 27% in the first half of 2011.”  

The full report is here.

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