The country’s largest money manager BlackRock, recently asked Americans who are participating in a defined contribution plan like a 401(k) how they see themselves as prepared for retirement. Most of those individuals said that they were prepared for the future and had a generally optimistic view towards retirement. This suggests, however, that individuals who are in workplace defined contribution plans may actually be too confident about their future returns.
Last year, 52% of people said they were on track to retire with the amount of money and the type of lifestyle they wanted. This year that number increased to 50% and approximately 70% of Americans believe they will able to save enough to meet their financial goals for retirement. One of the challenges with this, however, is that those same individuals had very optimistic feelings about what will happen in the future with regard to how much money they’ll be able to generate. 66% of the savers who participated in the survey, for example, expect that their returns over the next ten years will keep in pace with past performance.
Of those individuals who participated in the survey, 17% expected higher than current returns. Approximately two-thirds of those employees said that they did not know that Wall Street has anticipated lower returns in the near future.
Given that there is such a disconnect with retirement planning, it is no surprise that up to 60% of Americans across the country do not have a will either. Financial planning and estate planning can be difficult topics to discuss but they are both equally important for helping an individual accomplish all of his or her goals.