Automatic savings improves retirement confidence

But problematically, nearly half of pre-retirees (46%) say it’s difficult to save additional funds outside of their automatic savings vehicles given all of the financial demands they are facing. Almost half (45%) express a desire for more automatic savings vehicles to add to their savings plan.

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Pre-retirees also felt they got a later start to saving than they would have wanted. Respondents report having begun a serious savings plan at 34 years of age on average, but wish they had started an average of eight years earlier—making age 26 the “magic age” to kick off a meaningful savings program.

Some were even more concerned about when they started seriously saving: one quarter of pre-retirees wished they had started saving more than 10 years earlier.

The survey also shows:

• pre-retirees with children living at home find it even more difficult to save outside of their automatic savings vehicles with 58% reporting that it’s difficult;
• men more than women are confident in their automatic savings, with 68% of male pre-retirees and 59% of women reporting more confidence in their auto pilot savings than in other forms of savings;
• pre-retirees with children living at home are more apt to want more automatic savings vehicles in their savings plan, with 58% wishing for more, compared to 45% of all pre-retirees; and

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“Pre-retirees sit in an important vantage point—they are in a position to share what has worked well for them as they inch toward retirement,” says Chris Blunt, president of New York Life’s investments group. “These 50 and early 60 year olds wish they had started a serious savings plan in their 20s and finding ways to put savings on auto-pilot is the key to that plan. There is still time for earlier generations to react to these two pieces of advice.”

Also read:

• Most companies improving auto features
• How well does auto-enrollment work?