RSS Facebook Twitter LinkedIn

Featured Advisor

Ed Meek
CEO/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, playing and following basketball, playing golf, and participating as an advisory board member for Breakthrough Urban Ministries.

Click to see the full profile

Share |

Sixty percent of 401(k) Plan participants over age 50 don't have enough savings to retire.

Recent survey says older 401(k) plan participants don't have enough to retire

| BY Catherine McBreen



Recent research completed by Spectrem Group with 401(k) and other defined contribution plan participants indicates that only 39 percent of plan participants over the age of 50 feel they will have sufficient income to live comfortably in retirement.  This underscores the ongoing challenge faced by Americans planning for retirement.

This fear of not having enough retirement income is reflected in the somewhat pessimistic attitudes of the over 50 participants.  Only 45 percent of the over age 50 participants feel that their financial situation is better now than a year ago.  That compares to 60 percent of those under age 35 who feel that their financial situation is better now than a year ago.  And 74 percent of participants under age 35 believe that “happy days are here again” and that their financial situation will be better in a year.  That compares to only slightly more than half (55 percent) of those participants over age 35 who feel things will be better in a year.

Spectrem’s survey was conducted in the first quarter of 2013 with almost 1500 defined contribution plan participants.  According to Spectrem’s President, George H. Walper, Jr., the results were not surprising.

“Our research at Spectrem with investors of various types and wealth levels has shown that investors with $100,000 to $1,000,000 of net worth have not yet experienced the benefits of the stock market highs”.  According to Mr. Walper, “many of these households retained assets in cash until they were certain the downturn was over.”

Participants who are over the age of 50 are unlikely to dig themselves out of the hole quickly.  Fifty seven percent prefer a guaranteed rate of return for a majority of their investments. Only a third are willing to take significant risk on a portion of their portfolios.

Despite the fact that most participants don’t feel they have sufficient income for retirement, more than 60 percent of participants plan to retire between the ages of 63 and 70.  Only 70 percent believe they will be working past the age of 70.

How will they overcome the fear of not having enough retirement income?  It is likely that many participants have not yet fully addressed their retirement issues.  Like the camel with its head stuck in the sand, Baby Boomers are hoping for the genie with Aladdin’s lamp to come and make their retirement dreams come true.  Maybe that retirement home in the Caribbean isn’t so realistic?

About the Author

Catherine McBreen

Catherine S. McBreen is President of Millionaire Corner.  McBreen plans and develops content for Millionaire Corner.  Catherine balances editorial content to meet the informational needs of both new and seasoned investors.  She designs special monthly surveys on topical issues affecting the economic environment.

McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law.  She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.

Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences.  She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth.  Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.

McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)

Catherine is the mother of four and is involved in many school and community events.