The Conference Board, an independent business membership and research association, recently released a new report stating that more employees are planning to delay retirement. The reason is simple. Despite the improving economy and how well the stock market has been performing lately, employees don’t believe they have enough savings to retire.
And they may be right. Fidelity Investments, the largest 401K administrator in the States, reported this week that 401K balances increased 12 percent last year, with the average year-end balance being $77,3000. However, retirement calculators routinely indicate that savings of $1,000,000 or more is actually needed for a comfortable retirement.
According to the Conference Board, 62 percent of 45- to 60-year-olds reported at least a 20 percent decline in the value of their financial assets since the start of the 2009 market crisis. In 2010, only 42 percent of respondents made this claim.
Employees of both genders and across all ethnicities and socioeconomic classes have plans to retire later, although those who have recently experienced a job loss are more likely.
Financial consulting firm Kasina recently surveyed 2,500 financial advisors to the wealthy who reported that 33 percent of their clients planned to retire at or after age 68 and 10 percent were likely to retire at or after age 71.
Delayed retirement planning can pose significant challenges to employers who want to reduce costs and provide development opportunities for younger workers.