The most trending tax and financial industry issues.

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Lane Keeter, CPA

Partner: Tax Consulting, Estate Planning, and Heber Springs Managing Partner

Retirement In Sight #3 (Musings for Current & Future Retirees)

Would You Pay More for a Better Employee Retirement Plan?

If that trade-off sounds worthwhile, rest assured you are not the only one who feels that way. Sixty-six percent of the working Americans surveyed late last year by consulting firm Willis Towers Watson said that they would defer a greater percentage of salary than they currently do if their potential retirement benefits were upgraded, and 61% said that they would increase their plan contributions if they were offered a guaranteed benefit, in the manner of a traditional pension.

The quality of employer-sponsored retirement plans appeared to matter more to the respondents than the quality of group health benefits because just 36% of them indicated that they would trade more of their pay for an improved workplace health care plan. Retirement benefits even mattered more to them than time off: only 58% said that they would surrender equivalent compensation in exchange for more personal and vacation time.

One finding from the survey also amounted to a memo to American companies: 43% of the respondents noted that their workplace retirement plans did not give them enough options or flexibility.1

Staying Put After Age 60 Sounds Good

Every year, there are annual lists of the "best places to retire." Today's seniors may be ignoring them. One new study identifies "home sweet home" as the most popular retirement destination of all.

United Income, a money management firm, just released an in-depth analysis of federal government and think-tank data titled The State of Retirees. It finds that older Americans are less transitory than they once were: since 1980, the number of retirees who have moved within the past five years has shrunk from 23% to 15%. Just 1% of moving retiree households in 2015 relocated to another state.

Retirees are also more suburban than they were in the 21st century: about half live in such communities, a 40% increase over 40 years ago. As noted retirement researcher (and United Income CEO) Matt Fellowes notes in the study, "[the] retired population is likely choosing to stay near friends, family, and the cultural attractions, like sporting teams and theaters, that they have come to know well."

Aging in place feels easier and probably seems cheaper.2

When It Comes to Retirement Savings, How Much Is Enough?

While it is hard for any pre-retiree to determine an exact answer to that question, it seems some are just stumped. A Bankrate survey just asked working-age Americans how much they should save to have a comfortable retirement, and the most common answer (61%) was "Donít know." The average estimate of those 39% who ventured a guess was $650,000. On average, members of Generation X felt they would need $1 million, while baby boomers and those age 73 and older most frequently said $500,000.

Just 16% of the pre-retirees surveyed said they were deferring 15% or more of their salaries into retirement accounts, which is a common recommendation these days. Twenty-one percent reported saving 5% or less per paycheck. That does not portend good things to come, given that workers older than 50 should have the equivalent of several times their salary saved for retirement.

Yes, retirement planning is an "inexact scienceî" but that does not mean an individual or couple can simply wing it and hope for the best. Before retirement approaches, a conversation with a retirement planner should happen, to help a pre-retiree identify income needs, potential income sources, and threats to savings. That discussion may bring more clarity to a retirement transition.3


In polling 9,760 retiree households, the BlackRock Retirement Institute and Employee Benefit Research Institute recently found that retirees of "medium" wealth had an average of 77% of their non-housing assets left 18 years into retirement.4

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