Approximately 60 percent of workers won’t be able to maintain their living standards if they retire at age 65 because they are woefully behind in saving the money they’ll need, a new Aon Hewitt analysis has determined.
The global talent, retirement and health solutions arm of Aon drew its conclusion based on an analysis of 77 large employers and their 2.1 million employees. Aon Hewett based its assumption on retirement at age 65, noting that exact income replacement will depend on factors including age, income, retirement age and Social Security.
Aon Hewitt found that only 1 in 5 workers are on track to meet or surpass their retirement needs, assuming they do so at age 65. About 20 percent more are close to that goal, though they’d need to adjust their lifestyles to get there.
The rest – about 60 percent – don’t have enough money to retire at age 65, Aon Hewitt found. As a result, the median age that U.S. workers will be able to retire and be financially sound is age 68. About 16 percent won’t even have enough money to retire by age 75, the analysis noted.
Aon Hewitt identified the problem: most workers aren’t planning enough for long-term financial goals.
“The most important thing they can do is to establish goals for the kind of retirement they want and determine a savings plan to meet those needs and desires,” Rob Reiskytl, an Aon Hewitt partner, said in prepared remarks. “This might mean starting to save more now, delaying retirement by a few years, or making a conscious choice to retire with a lower living standard.”
Source: Aon Hewitt/Aon plc