SURVEY SAYS: Have you measured your retirement readiness?

Last week, I asked NewsDash readers: Have you used a retirement planning tool to measure your own retirement readiness, and if so, what did you find out?

The vast majority of responding readers (92.2%) said they have used a retirement planning tool to measure their own retirement readiness, while the other 7.8% have not.  

The good news is two-thirds of those who responded said they are either ahead in the game (22%) or right on track to reach their retirement savings goals (44%). Twenty-two percent indicated they are behind but catching up is realistic, and 12% are so far behind they may never be able to retire.  

Among “other” responses, one reader said he or she didn’t need a tool to know his or her own retirement readiness. Others said they used multiple tools and got different results. Still others said they are ready if certain circumstances do or don’t happen.  

In the verbatim responses, several respondents indicated they have been hypocritical in touting the tools, but not using one themselves, with one reader responding, “I am a classic example of do what I say, not what I do.”  

Others discussed the flaws inherent in many retirement calculators. My favorite response was: “The tool lies.”


Going along pretty. Could back off by monthly contribution a little. 


Most of these calculators carry with them imbedded assumptions that make a BIG difference. Check out what Nevin Adams recently wrote: 


I was doing much better until lied to by the CEO of the company I work for...the resulting decimation of my 401k from stock losses has put me in a hole from which I probably will never get out. 


I have saved diligently and expect to do just fine in retirement. 


It is all a matter of planning. What can I give up now, so I can have something for later? Also keeping track of indebtedness - no mortgage payments, please, when I retire. My parents, being children of the depression, taught me from an early age to be frugal. I'll be ready to retire from a financial perspective probably before I am ready to give up the routine of coming into the office every day. 


Too busy at work to take care of my own planning. 


There are many tools to choose from and each tool has assumptions that it makes. So each individual needs to look at their own situation and the assumptions and use several tools to really get a good "feeling" for where they stand. 


My husband and I work with a financial planner. We have a plan in place and are on track to cover our financial needs throughout retirement. 


We only preach that participants should use these tools. We don't actually use these tools ourselves! 


My parents taught me well. I'm glad I heeded their advice. 


i would like to save more, but trying to get rid of debt first 


According to the last one I did I will really enjoy my last 25 years of retirement, when I retire at age 100. 


Ironic to be in this field for 30 years and not be able to claim I am on track! Somehwere, the pension gods are laughing.....Sigh..... 


I'll stay on track if my spouse and I maintain a budget now, monitor our spending and stick to our retirement savings game plan. 


4 years & 67 days away from retirement, have 83% of retirement fund goal socked away, and just purchased our retirement home in Vegas! I am so ready! 

Verbatim (cont.)  

I managed to build a nice 401(k) balance at my first job out of college. I didn't save a huge percentage of salary, but there was generous profit sharing and a regular match for which I was and am very grateful. In terms of other people, I think it's a good thing to get people to focus on retirement readiness, but the process needs to recognize that people will have to adjust their lifestyle to whatever income and assets they have at retirement. I mean, if someone can safely predict that they will have little or no debt in retirement, plus an income of $30 - $40K, they might well be just fine in many parts of the country. Sure, they won't be able to travel the world or eat at restaurants every night, but they will be "ready" for retirement. The calculators that want you to load up your retirement expenses and add in all your hopes and dreams are setting people up for failure because these tools will dramatically overestimate the income "need" in retirement. Omitting things like the vacation condo in Hawaii, etc. will produce a more realistic picture. 


I worked for many years at a company that did not offer any type of pension plan, not even a 401(k) plan. I think I'm doing pretty well with catching up, just hope I can continue to do so. It is getting harder and harder with low or no raises and continually rising co-payments for health care. Not to mention gas and food prices going through the roof. I really am tired of all the fortunate ones who don't understand that not everyone has had the advantage of working for a company with decent benefits. The lack of universal health care in this country really makes things difficult for retirement readiness. 


I didn't think the retirement planning tool was entirely useful because even though it said I was on track, I don't agree. 


I will be 30 this year, and cannot wait to retire. I'm trying to do everything I can to be prepared! 


Need more savings 


Age 70 - still working 


The tools they use to "measure" your retirement readiness are a joke for people in my monetary, single mom position. I'll be at my kids' doors asking for a handout - karma is a bi**ch! ;^) 


Online tools for calculating savings needed for retirement always seem to have something missing, and using different tools can yield wildly different results. 


Would look better without Obama 


I am only retirement ready because my father was so adamant that I "pay myself first". I started working in 1982 when the Defined Contribution plans were really ramping up. If it weren't for his mantra, this would not have been on my radar screen in my 20's and 30's or as I changed employers. Thanks to my Dad, my retirement accounts have weathered the economic storms of this century. 


I am so grateful that I ended up working in this industry because otherwise I'm sure I would not have given retirement readiness a second thought. I started working here in my late 20's with zero retirement savings and less-than-zero worry about retirement in general. That quickly changed when I learned how important it was to save--especially at that age! Now, five years later, I see what my disciplined and consistent saving has accomplished. I get a little teary (with joy!) sometimes when I check my statement and think that it wouldn't be so big had I not been working here and thinking about this stuff every day. 


one tool told me "you will never have enough in your lifetime" That was sad.... 


The tool indicates that I have a 95% chance of my retirement savings lasting until I am 93. Wil still max out all retirement accounts to be sure. LOL ofcourse it will not matter if the world ends in Dec 2012! 


I'm in the business and therefore have studied readiness and used different calculators and understand the the nuances of the various assumptions and models. But to predict my future health, life expectancy, future medical costs, living cost, etc. is hard. So like everyone else, I don't know how to answer the question, "how much do I need?" Therefore too much aint enough! 


It all depends upon the market and whether or not I make 5% return, no return, or lose ground.

Verbatim (cont.)  

One can never have too much before retirement... 


I have gone through the basic replacement ratio tool offered by my employer but really need to do the more in-depth analysis of going through a post-retirement budget, etc. I will never be "on track" because I want to retire as early as possible but also want to enjoy a great standard of living. I'd retire tomorrow if I could but that's not realistic (I'm 53). 


The caculator indicated I could retire now (in my early 50s) but that seemed terribly optimistic to me! 


I've actually used three tools with the same set of assumptions. FE gives me the latest date at 64, but they don't factor in Roth as nontaxable sources in retirement. Vanguard factors in Roth and gives me age 62. AARP factors in Roth and inheritance and gives me age 58 [I assume my last parent will live to 110 to be conservative, and being intimately involved with their finances and executor of their will have a solid handle on a conservative estimate]. I work in the industry and understand the quirks of each of these calculators -- but I can also understand why the typical saver could find the variety of results confusing! But, I'll probably follow in my parent's footsteps and work until at least age 65 anyhow. 


If I get sick in retirement, I am in deep trouble. 


I'm 30, but I'm trying to prepare. These tools are often geared toward near-retirees. They need to be geared to individuals my age so that we don't face a retirement crisis. 


Started early, very conservative allocation, and only occasional re-balancing has served me well 


The tool lies. 


I've used different retirement calculators and seem to be on track. How much is enough? A trusted financial advisor should be part of everyone's retirement planning. 


The tool indicated I'm "right on track" but I still feel insecure, even deferring the federal maximum plus the catch-up into my 401(k) for the past several years. 


I'm ready for retirement - just not sure I can afford it yet! 


I am a classic example of do what I say, not what I do. 


I'm going to have to work until I die... 


If Obama is re-elected then all bets, including retirement readiness, are off as he and his cronies are destroying the economy and the country. 


Underemployed for years, but with a new slightly better job w/pay increase, home refinance at 3.6%, retirement accounts up, I finally see there is hope of retirement in the duture. Of course, that depend on how long my children will go to college and live at home. LOL 


I think these tools need to condisder current spendable income and not just base everything on salary. If I am putting away 15% and having Social Security come out then my spendable income is much less than my current salary. If I need 80% of my spendable income, the goal is much easier to attain. Someone making $100K and saving 15% with 5% in Social Security (just using simple numbers for the example) would have spendable income of $80K. 80% of your spendable income would be $64K per year but that is only 64% of your salary. I may be completely wrong but this makes more sense to me since i won't be saving or paying Social Security when I retire. 


Hopefully another one or your readers suggests an online tool that includes flexibility for salary increase assumptions, add in for catch-up contributions when eligible, traditional DB benefit, Social Security benefit starting at different ages and the ability to include spouse's retirement plan(s) and Social Security, as well. 


I started in my early 30's deferring 10% of my income - and its paying off now (in my 50s)! 


i'm not even 30 so i have a long time horizon, but i still worry about not having enough! 


3 out of 5 tools suggest I'm on course. My horoscope reads as clearly. 


I've used these tools over several years. Initially I was surprized to find I was behind. I have steadily increased my retirement savings and am on track. 


My husband and I both used a retirement tool offered by our respective 401(k) providers. Mine indicated I was somewhat behind and his indicated he was ahead of the game. So, taking his results into consideration, I consider myself to be right on target!
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