TribLIVE

| Business


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Have a 401(k)? Retirement prospects fairly good

Email Newsletters

Click here to sign up for one of our email newsletters.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

By The Los Angeles Times
Saturday, Jan. 25, 2014, 9:00 p.m.
 

People with access to 401(k) plans for at least 30 years are on track for a reasonably comfortable retirement.

That's the upshot of a study measuring how Americans will fare in retirement.

The combination of Social Security benefits and 401(k) savings will provide most people with at least 60 percent of their inflation-adjusted pre-retirement annual income, according to the analysis by the nonpartisan Employee Benefit Research Institute.

More than four in five American workers — 83 percent to 86 percent — are likely to generate 60 percent or more of their pre-retirement income, the study calculates.

Between 73 percent and 76 percent of people will achieve 70 percent of pre-retirement income, the analysis finds.

A general rule of thumb is that workers need about 70 percent of pre-retirement income for a fairly comfortable retirement.

The EBRI study covers people who are eligible for 401(k)s, not those who participate. About 73 percent of workers with access to 401(k) plans take part, according to EBRI.

The ability to generate 60 percent to 70 percent of pre-retirement income is encouraging, considering the often bleak retirement statistics in many other analyses.

“I would think that's a very different message — a more optimistic message — than has been conveyed” in other studies, said Jack VanDerhei, EBRI research director.

There are several caveats.

The study assumes that Social Security benefits will not be cut, an uncertain prospect given the political controversy over the program.

More than that, many Americans simply don't have access to 401(k) plans. Only 59 percent of workers 16 and older are eligible to join a plan, according to EBRI.

Subscribe today! Click here for our subscription offers.

 

 


Show commenting policy

Most-Read Business Headlines

  1. Supreme Court justices ream EPA for ignoring costs to meet air standards
  2. Snappers treat revitalizes Lawrenceville’s Edward Marc Brands chocolatier
  3. Heinz executives to dominate post-merger management of Kraft Heinz Co.
  4. Bank of New York Mellon seeks to intervene in N.J. casino saga as power plant taps collateral
  5. Drillers to submit electronic records on fracking chemicals to Pa. DEP
  6. Pending home sales in U.S. climb to 9-year high
  7. Greece makes stocks slip to worst day of year
  8. University mine rescue teams join to set rules, competitions
  9. Energy Spotlight: Erin Magee
  10. Innovative desk makers take stand against sitting at work
  11. Right age for benefits? It depends