They’re not really trying to be grasshoppers instead of ants.But people are paying off short-term financial goals with moneythat they’re not using as retirement savings.

|

And a new survey found that the majority are citing immediateneeds that take priority over that day that could be years inarriving.

|

Read: Why workers aged 55-59 have more saved thanthose aged 60 and up

|

According to the survey from Natixis Global Asset Management, 51percent of respondents agreed with the statement “I need the moneytoday” as 60 percent reported saving less than 7.5 percent inretirement accounts and 40 percent reported saving less than 5percent.

|

To make matters worse, 37 percent said they had borrowed fromtheir retirement accounts--38 percent of whom needed the cash for afinancial emergency, and 19 percent who put the money toward buyinga home.

|

Thirty percent overall have taken an early withdrawal from aretirement plan, while 43 percent of those who have changed jobselected to take a lump-sum distribution rather than roll the moneyover into another plan or just leave it where it was.

|

Read: 10 least money-smart states

|

And this is from people who average a decent amount of income;according to Natixis, the estimated average annual income of surveyrespondents is $100,118.

|

It’s not that they don’t know they’ll need more than they’resaving.

|

On average, they said they will need $805,000 to fund theirretirement; they expect to live on that total for another 23 yearsafter they stop working.

|

However, they haven’t come anywhere near close; so far, allthey’ve managed to save in their employer-provided plan is anaverage of $83,000.

|

Thinking they have outside savings? Think again: overall theyonly have an total of $95,000, including all sources of retirementsavings. That’s just 11 percent of what they say they’ll need.

|

So why are they pulling money out of plans and just not savingin the first place?

|

There are several reasons: student debt (23 percent say theyhave to focus on paying off college loans) and personal debt (34percent overall, but 40 percent of GenXers say they have too muchpersonal debt to be able to think about putting that money towardretirement instead).

|

They also have some beefs with their retirement plans: 50percent say their employer doesn’t match workers’ contributions, orthe company match is too small—and they find those reasonssufficient cause to abstain from the plan.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.