Setting Retirement Savings Goals Leads to Increased Engagement

May 4, 2011 (PLANSPONSOR.com) - When people set a goal for their retirement savings, they tend to be more engaged in actively planning for their retirement, according to a survey of more than 2,400 plan participants conducted by Diversified’s Retirement Research Council.

Twenty-nine percent of respondents established a retirement income goal in the past year, an eight percentage point increase from 2010. Forty-one percent increased the amount they are saving for retirement, a three percentage point increase over last year.    

In addition, 62% of those surveyed said they monitored their retirement outlook to assess where they stand vis-à-vis their retirement income goals and for insight into how they can adjust their asset allocation or contribution level to improve their outlook.   

According to a press release, the survey also underscored the benefit of educating participants about goal setting, with 71% of respondents who are not confident they will have enough for retirement saying they are likely to contribute more to their retirement savings accounts if they were educated on how much they actually needed to retire. Participants overall indicated they want this kind of assistance as well – 57% expressed interest in getting help with setting goals, and 50% would welcome assistance with monitoring goal progress.  

Overall, participants are saving more for retirement – 66% of participants are saving 6% or more, a six percentage point increase over the number of respondents doing so a year ago.  

Confidence Still Lacking  

While most participants have a retirement goal, they are not very confident they will have enough for retirement, and 35% indicated they were simply guessing about the amount they needed.  

Less than one-in-three participants are confident about the amount of income they will have in retirement: only 7% said they are extremely confident and 21% said they are very confident.  Those without a goal are even less confident, with only 2% saying they are extremely confident and 6% very confident.

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