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A new survey sheds light on the biggest factor putting a damper on American workers’ retirement plans: job insecurity. ERBI’s 2012 Retirement Confidence Survey showed that job fears have surpassed concerns like paying down debt, making mortgage payments, rising health costs and the shaky economy.
According to Greg Burrows, senior vice president, Retirement and Investment Services at Principal Financial Group, employment uncertainty surpassed our other concerns, such as paying down debt, making mortgage payments, rising health costs and the shaky economy.
The sandwich generation effect
American workers—and boomers in particular—are feeling what Principal Financial’s Greg Burrows calls the “sandwich generation effect.”
“Today workers are increasingly overseeing firsthand the care of their own parents, and friends of the family,” Burrows says. “It’s become a very real problem for workers.”
Compared to 1991, the EBRI finds that more than three times the amount of workers are planning to work past 65-years-old, the typical retirement age. Meanwhile nearly half indicate they’re afraid they’ll need to quit work unexpectedly, due to changes in health, family matters or downsizing/closures at work.
What you can do
Planning is integral, says Burrows, so consider doing the following to pad your nest egg:
Use retirement calculators
Workers using these tools tend to save 40 per cent more than those who don’t, EBRI finds. And they’ll help you understand so much, says Burrows. “They’re simple to use, can be used independently and will instantly show where your savings needs are,” he adds.
Plan for the worst
Rather than make assumptions about what will happen, pad your emergency fund, actively save in a retirement plan (Burrows recommends saving between 11 and 15 per cent of your paycheck) and “manage the debt side of the ledger,” he says.
And take advantage of your company match if you haven’t, it’s the easiest way to double your savings.
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