‘Successful Savers’ Actively Engage in Retirement Planning

"Our survey results reinforce the importance of setting goals and monitoring plans to balance … emotions,” says Rich Ramassini, CFP, director of strategy for PNC Investments.

Emotional factors play a key role in planning for life goals, as three-quarters (77%) of those planning for retirement listed living comfortably as a top goal, while 70% cited travel and 56% selected spending more time with family, according to the findings in the most recent PNC Perspectives of Retirement Survey.

However, of those considered to be “successful savers,” 72% are confident they will achieve these goals. PNC defines “successful savers” as working adults and retirees from ages 25 to 75 who reported investable assets of at least $50,000 (younger than 44) or at least $100,000 (ages 44 and older), not including funds in employer-sponsored retirement accounts.

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Most successful savers are taking the concrete steps they need to make those goals achievable. Among respondents currently participating in a retirement plan, 70% are investing with investment firms, banks and brokerage firms, and in mutual funds, and 77% regularly revisit their plans. In addition, 53% are investing in employer-sponsored retirement plans. Nearly half (45%) have been saving for at least 20 years.

Two-thirds of respondents have monitored their plan for retirement against their goals or worked with advisers to set goals.

According to the survey, 15% cited not having enough money to save the way they know they should as a hurdle to setting or meeting retirement savings goals. Eleven percent cited procrastination, 10% lack of time, 7% lack of focus and 6% fear or worry. However, two-thirds said none of these were hurdles to setting or meeting their retirement savings goals.

“We believe emotions are in play when people think about retirement,” says Rich Ramassini, director of strategy for PNC Investments. “Our survey results reinforce the importance of setting goals and monitoring plans to balance those emotions.”

More findings can be found on PNC’s website.

Institutional Investors See Eight Quarters of Positive Returns

Wilshire’s data shows this was the best one-year return since the year ending June 30, 2014; that year ended with a 15.51% median return and a third consecutive quarter to post an annual return above 10%.

Institutional assets tracked by the Wilshire Trust Universe Comparison Service delivered a median return of 3.25% for all retirement plan types in the third quarter of 2017.

As Wilshire lays out, this implies a median one-year gain of 11.40%, markedly higher than the low- to mid-single digit returns that had been forecasted by many.

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“This quarter marked the eighth consecutive positive quarter, the longest string of positive quarterly returns for all plan types since June 1998, which marked a string of 14 positive quarters in a row,” explains Robert Waid, managing director, Wilshire Associates. “This quarter’s return boosted the one-year return to 11.40% for the year ending September 30, 2017, compared to 11.31% for the year ending June 30, 2017.”

Wilshire’s data shows this was the best one-year return since the year ending June 30, 2014. That year ended with a 15.51% median return and a third consecutive quarter to post an annual return above 10%.

For context, the Wilshire 5000 Total Market Index returned 4.59% for the third quarter and 18.89% for the year ending September 30, 2017, while the MSCI AC World ex U.S. for international equities rose 6.16% in the third quarter and 19.61% for the year. At the same time, the Wilshire Bond Index also gained 0.63% in the third quarter and 0.96% for the year.

“This resulted in a positive range of median plan-type returns in the second quarter, as the low median return was 2.03% for Taft Hartley Health and Welfare Funds and the high median return was 3.63% for public funds with assets greater than $5 billion,” Waid reports. “For one-year returns, the low median return was 7.15% for Taft Hartley Health and Welfare Funds and the high median return was 12.81% for public funds with assets greater than $5 billion.”

Other data from Wilshire shows, for the third quarter in a row, large public funds outperformed small public funds. Large foundations and endowments continued to have significant exposure to alternatives, with the median exposure rising slightly to 37.94% in the third quarter. All plan types with assets greater than $1 billion experienced median returns of 3.28% for the third quarter and 11.83% for the year ending September 30, 2017, compared to plans with assets less than $1 billion, which experienced median returns of 3.23% for the third quarter and 11.19% for the year.

As Waid further observes, in the third quarter, only Taft Hartley Health and Welfare Funds experienced median returns worse than the 60/40 portfolio, which returned 3.01%. This pulled the median return for all plan types down slightly to 3.25%, but it remained above the 60/40 portfolio for the third consecutive quarter.

“The first quarter of 2017 was notably the first time this happened since the quarter ending June 2015,” Waid notes.

Wilshire TUCS is a cooperative effort between Wilshire Analytics, the investment technology unit of Wilshire Associates Incorporated, and custodial organizations. More research and information is available here

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