Break from the Grind July 5, 2018

A Little Friday File Fun

And now it's time for FRIDAY FILES!
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In Minersville, Pennsylvania, a 44-year-old parking ticket has been paid. According to the Associate Press, the police department received a letter last week with $5 and a note inside. The return address was “Feeling guilty, Wayward Road, Anytown, Ca.” Police Chief Michael Combs told WNEP-TV the note said, “Dear PD, I’ve been carrying this ticket around for 40 plus years. Always intending to pay. Forgive me if I don’t give you my info. With respect, Dave.” The fine for the 1974 parking ticket in the eastern Pennsylvania town was $2. But the person added $3 for interest. The same ticket today would be $20.

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In Warsaw, Poland, an environmental group has received a phone bill of 10,000 zlotys ($2,650). The group was using the phone transmitter to track migratory movements of a stork. According to the Associated Press, the bird’s last signal came from Sudan on April 26. But later, the group heard that some 20 hours of calls had been made using the SIM card in Sudan.

In the UK, during a speech in the House of Commons, Defense Secretary Gavin Williamson was interrupted—by his phone. He was speaking about Islamic State terr.orists in Syria when Siri―triggered by the country’s name―said “I found something on the web for Syria.” The Huffington Post reports that as Williamson began looking around in surprise, House of Commons members erupted in laughs. “It is very rare that you’re heckled by your own mobile phone,” Williamson said as he apologized.
An oldie, but goodie.

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Why are they teaching about Cheez-Its in church?

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Grandpa shows off dance moves in the mall.

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Data and Research July 5, 2018

Expectations About Income Needed in Retirement May Be Too High

In the U.S., pre-retirees think they will need 74% of their income to live comfortably in retirement, but retirees actually receive 58%, a survey finds.

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People ages 55 and up expect to need 13% more income to live comfortably in retirement than retirees actually receive, according to Schroder’s “Global Investor Study: Saving for a Comfortable Retirement,” based on a survey of 22,000 people in 30 countries. In the U.S., pre-retirees think they will need 74% of their income to live comfortably in retirement, but retirees actually receive 58%, a difference of 16 percentage points.

However, the cost of living in retirement takes up more income than expected. In the U.S., pre-retirees expect they will spend 32% of their income on living costs, while retirees actually spend 54%.

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The majority of retirees consider their income to be sufficient (92% in the U.S.), but most could actually do with more (44% of that total say they could do with more income). Upon retirement, people allocated more of their financial resources to investments than pre-retirees expect to. In the U.S., pre-retirees expect to invest an average of 8% of their portfolio in retirement, but once retired, they invest 18%.

Expectations for financial allocation at retirement matures as people approach retirement. For example, Millennials expect to allocate 23% of their retirement savings to their retirement income, and Baby Boomers, 38%. In reality, retirees allocate 36% on average.

Globally, people feel they should be saving 2% more of their income for retirement. In the U.S., people are saving an average of 15% of their income for retirement, but they think they should be saving 16%. The level of investment knowledge people think they have correlates with retirement expectations and behaviors. For instance, those who think they are financially savvy have a smaller gap between what they save and what they think they will need.

People’s top two sources of information when making decisions about investments for retirement are their own research from independent sources and insight from advisers. In the U.S., 8% are doing their own research and 8% are relying on advisers.

Research Plus Ltd. conducted the online survey for Schroders last March and April. The full report can be downloaded here.

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