The results of Putnam Investment's latest study should come as no surprise.

The company, in a survey of nearly 3,300 working Americans, found that long-term savings, access to a workplace retirement program, and working with a financial advisor are the best ways to achieve success in retirement. These results are true regardless of income level.

The Putnam Lifetime Income Score research looks at behavioral tendencies, mortality factors and current retirement and non-retirement assets, such as investment securities, annuities and cash value life insurance, to estimate the level of income that U.S. households are currently on track to replace in retirement. The study found that American households are on track to replace 64 percent of their current income in retirement. And while that number is promising, it's clearly just a start.

Putnam also looked at the role Social Security will play for Americans about to retire. According to the study, there is a huge reliance on Social Security; the 64 percent replacement score dives to a mere 30 percent when Social Security is not factored in. And for low-income households and the boomer generation, the numbers are even worse. Those aged 50 to 65 have a 60 percent replacement score, which drops to 28 percent without Social Security. For households with less than $50,000 in income, removing Social Security drops the score to barely 17 percent.

Other key findings of the study include:

Individuals who appeared to be on the best track to replace current income (those on track to replace 100 percent or more of their pre-retirement income) and individuals who seem to be the worst positioned (those on pace to replace less than 45 percent), have exactly the same mean household income — $93,000 annually. The differentiator? Savings behavior.

The best-prepared Americans are participants in 401(k) or other defined-contribution plans who are contributing 10 percent or more of their income to their plan; their scores are 124 percent. Those who are currently contributing 4 percent to 10 percent of their income to their retirement plan still score 84 percent replacement. But those who do not defer any of their income scored only 58 percent. The least-prepared Americans are households that are not eligible for an employer-based retirement plan, currently nearly half of the population, which have an average Lifetime Income Score of 46 percent. Those who are not eligible for employer-based plan, are even further unprepared for retirement if Social Security is excluded, as their overall score plummets from 46 percent to 8 percent.

One third of Americans say they are considering delaying retirement beyond their original target age, including majorities of those currently age 55 to 59 and age 60 to 65; half of America’s workers say they expect to work at least part time in retirement; four in 10 say they will have to reduce their standard of living in retirement; and, one in four fears running out of money entirely in retirement.

Those with a paid financial advisor had a Lifetime Income Score of 82 percent, while those without an advisor scored 61 percent. Those with an advisor scored higher than those without an advisor at every level of household income. Furthermore, those with a paid advisor still managed to score 51 percent without Social Security, while those without an advisor scored just 23 percent without Social Security.

The study also found a close correlation with retirement preparedness and retirement confidence. Those with Lifetime Incomes Scores of 100 or more are far more confident that they know how much money they will need for retirement and that they are financially ready for retirement than those with scores of 45 percent replacement or below. They are also more likely to expect that they will live as well or better in retirement than they did while working, that they will have enough to pay for healthcare and that they will be able to leave a legacy to their heirs than those with lower Lifetime Income Scores.

Men are much more prepared for retirement than women. Men averaged a Lifetime Income Score of 73 percent, while women scored 60 percent. Women are also far more reliant on Social Security – they scored 21 percent once Social Security was removed from the equation – compared with men, who scored 41 percent.

Instant Insights /

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