Every year, BlackRock surveys over one thousand active
participants about retirement and their workplace retirement
savings plans. Sometimes the survey confirms assumptions we've
made; other times, it surprises us.
Here is one finding from
this year's survey
that does more than surprise me:
46% of participants who are NOT saving for retirement say it
is because they do not know how much they will need.
It's easy to get frustrated with the reasoning here. Clearly,
saving something, even if it isn't enough, is going to be better
than saving nothing. But if you think about what these
participants are really telling us, it becomes easier to
sympathize with them. What they are saying is, not knowing leads
In fact, another survey finding, that 77% of participants
would increase their savings if they know how much they needed to
save, more or less confirms this. Knowledge, in this case, equals
It's safe to assume that if you are reading this blog post,
you are probably motivated already. But here is something to
consider. When it comes to how much we will need in retirement,
none of us know. The best we can do is to narrow down the
uncertainty and stick to the plan.
Nonetheless, we can all use a little more clarity about our
retirement futures. Here are three steps for creating a little
more clarity and, possibly, some extra motivation.
Step One: Know where you're going
. What do you want your retirement to be like? The more you can
visualize your retirement, the more you can define the concrete
steps you need to get there. The
Define Your Retirement
tool will help create a personal retirement profile.
Step Two: Check where you are
. You have a plan - is it working? The Department of Labor has
been very focused on helping people understand how their
retirement savings translates into retirement income. Their
lifetime income calculator
is a good starting place to get a sense of whether you are on
Step Three: Prepare for landing
. If you are between 55 and 64 and starting to get serious about
the transition into retirement, the simple to use
can estimate how much future income your savings may provide at
There is always going to be uncertainty about reaching your
retirement goals. The key is to not let uncertainty reach the
tipping point where it leads to inaction. No single step will
ensure complete clarity. But by using the tools linked above or
others like them, you can create the confidence to keep moving
forward - and maybe save more.
Managing Director, is head of BlackRock's US & Canada
Defined Contribution Group.
You can find more of his posts
There can be no assurance that an investment strategy based
on the tools will be successful.