Financial Professionals Increase Retirement Confidence

The latest Principal Financial Well-Being Index finds workers who use the help of financial professionals are more confident in the adequacy of their retirement savings than those who are not.

Forty-two percent of workers who use an adviser say they are saving enough money in order to live comfortably in retirement, compared to 22% who do not use an adviser.  

Workers also report mixed views on how much they need to put away in order to have enough money coming in during retirement. Twenty-two percent think they need to save 1% – 8% of their pay (including any employer match), and 56% think they need to save 9% or more of their pay (including any employer match).In practice, more workers (42%) report saving 1% – 8% of their income, including any employer match, than those who say they are saving 9% or more (30%).    

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The survey also found the number of Americans who are concerned about their long-term financial future rose dramatically – to 67% in the third quarter for retirees (from 43% last quarter) and to 68% for workers (from 63%).  

Short-term concerns also grew in the third quarter with 28% of workers and 36% of retirees reporting they are pessimistic regarding the economic outlook for the rest of 2011, up from 20% for workers and 21% for retirees last quarter. Looking beyond 2011, 58% of retirees and 46% of workers say the economy will worsen in 2012.

Saving for College More Difficult  

The Principal Financial Well-Being Index found that among workers and retirees who have children that are not already out of school, 39% of workers and 26% of retirees are saving for their children’s college education. Seventy-four percent of workers and 59% of retirees report that the economy has made it more difficult to save for their children’s future college education.  

Nearly three quarters of retirees (72%) who are saving for their children’s college education are satisfied with their level of savings, while only 30% of workers who are saving are satisfied.  

For workers, the top reasons for not saving for their children’s college education are finances (53%), followed by the expectation their children will pay via student loans (26%) or through scholarships (25%).  

See the full report and past results at http://www.principal.com/wellbeing.

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