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Benefits January 25, 2006
Older Boomers on Track with Retirement Income
January 25, 2006 (PLANSPONSOR.com) - Fidelity
Investments has announced that, based on recordkeeping data
from its Employer Services Company, baby boomers turning 60
this year have surpassed the $100,000 mark for average 401(k)
account balances.
Reported by Rebecca Moore
In its announcement, Fidelity said the average account balance for those age 59 as of the end of 2005 was $112,000. Combined with what older boomers, age 50 – 59, expect to receive from social security, pensions, and personal savings, Fidelity says the group is on track to replace 60% of their pre-retirement income. Fidelity recommends an 85% replacement rate.
“The 401(k) will be a vital source of income for older Boomers, but even factoring in that this group will likely reap greater pension and social security benefits than future generations, they still face a substantial income reduction in retirement,” said Jack Callahan, president of Fidelity Institutional Retirement Services Company, in the announcement.
Research from Fidelity’s Retirement Index shows 61% of older boomers expect to receive a pension to help supplement their retirement savings, compared with 42% of younger workers, born after the boomer generation. Additionally, Fidelity said, 50% of older boomers believe they will need to work in retirement to cover basic expenses, with 37% having to do so just to pay for health expenses.
Fidelity’s Web site is www.fidelity.com .
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