In the Fall of 2010, we surveyed millionaire households (those with from $1 million to $4.9 million in investible assets) regarding their attitudes about their income in retirement. A full 85% are confident that they will have enough funds to live comfortably. Five percent have had to take hardship withdrawals from their savings. A remaining 9% have been hit with reduced employer contributions to their retirement accounts. This has affected confidence in their ability to retire comfortably.
Naturally, these reduced contributions have affected the younger millionaires more. These individuals are twice as likely to have employers who have cut employer contributions with 18% of respondents citing this reason. Understandably, only 73% of this age group (under 55), are confident about their retirement comfort level versus 84 and 91% of the 56-65 and over 66 age groups, respectively.
Contributing factors to this lack of confidence might be worries that social security might not be around when they retire. In addition, our data shows that business owners have not only had to endure cuts in 401(k) contributions, but they are more likely to have had to pull money out of their retirement plans as a hardship solution.
Also adding into this calculation is the fact that for people getting closer to retirement, the employer contribution just won’t move the needle much at this retirement-saving point in their lives and they aren’t counting on this money to make a noticeable difference in their retirement funds.