Teorema de Bolzano-Weierstrass

Without question there is an overriding degree of

anxiety and pessimism that is unprecedented over the period we have been measuring it in comparable surveys since 2000. And that almost certainly is a legacy of the 2008-2009 economic and financial markets meltdown, the ensuing anemic and “jobless” recovery to date and a generalized lowering of expectations that seems to have set in like a cold fog. Job vulnerability feeds the anxiety with 36% of all participants very or somewhat concerned about losing their job within the next 12 months. Among the pre-retiree group, those age 50+, this rises to 43% (see Figure 1, below).

Economic and employment anxiety leads in turn to deferred retirement dates with 33% of all

RONALDL. BUSH

FOUNDER ANDPRINCIPAL

BRIGHTWORKPARTNERS

Defined Contribution Retirement Plan

Participants on Retirement

BY

R

ONALD

L. B

USH

F

I G U R E

1 : Q . - H

O W C O N C E R N E D A R E Y O U T H A T Y O U M AY L O S E Y O U R J O B I N T H E N E X T

1 2

M O N T H S

?

F

I G U R E

2 : Q . - I

N T H E PA S T

1 2

M O N T H S H A V E Y O U C O N S I D E R E D D E L AY I N G Y O U R R E T I R E M E N T B E Y O N D Y O U R O R I G I N A L T A R G E T A G E

,

O R H A V E N

'

T Y O U

?

< 50 28% 38% 27% 7% 50+ 17% 40% 30% 13%

Not concerned at all Not very concerned Somewhat concerned Very concerned

< 50 25%

F

I G U R E

3 : Q . - G

I V E N T H E R E T I R E M E N T S A V I N G S Y O U H A V E I N P L A C E R I G H T N O W A N D T H E R A T E A T W H I C H Y O U A R E A D D I N G T O T H O S E S A V I N G S

,

W H I C H O F T H E S T A T E M E N T S B E L O W D O Y O U E X P E C T W I L L B E T R U E F O R Y O U I N R E T I R E M E N T

?

F

I G U R E

4 : Q . - W

H A T

'

S Y O U R B I G G E S T F I N A N C I A L W O R RY R I G H T N O W

-

T H E P R O B L E M T H A T K E E P S Y O U A W A K E A T N I G H T

?

You will work at least part time in retirement

You will have to reduce your standard of living

You will have enough money to pay for health care

You will live as well or better as you did when you were working

You will run out of money

You will be able to help out younger family members with tuition or housing expenses

You will be able to leave money to family members or charities

You will be in a position to travel extensively

53% 45% 33% 30% 25% 17% 16% 14%

Just keeping up with your monthly expenses

Saving enough for your retirement

Credit card debt

Long-term care for yourself or your spouse when you need it

Paying college tuition for your kids

Your health care expenses apart from catastrophic illness

The expense of catastrophic illness

Paying the mortgage and taxes on your home

Saving to buy a home

Long-term care for your parents when they need it

24% 15% 17% 19% 13% 16% 7% 13% 7% 2% 7% 15% 5% 6% 4% 5% 4% 0% 3% 3% Total 50-64

© 2012 Retirement Income Industry Association® 41

participants saying they have considered within the past 12 months delaying their retirement date beyond the original target age, increasing to 55% among participants age 50+ (see Figure 2, on page 39). Of course, the definition of “retirement” is in a state of flux – 53% of participants expect to work at least part-time in retirement.

Among the most troublesome findings, 45% of participants expect a reduced standard of living in retirement while only 30% expect to live as well

or better as when working (see Figure 3, top, on previous page).

There is widespread concern about health care costs and the potential burden of long-term care – people know they are expensive, potentially crushingly so, and there is great uncertainty as to how high is high, what to prepare for and how to do it. These concerns naturally are magnified among the 50+ pre-retiree group of participants (see Figure 4, bottom, on previous page).

F

I G U R E

5 : Q . - P

E O P L E S A V E F O R D I F F E R E N T R E A S O N S

. F

O R E A C H O F T H E S A V I N G S O B J E C T I V E S B E L O W

,

P L E A S E I N D I C A T E T O W H A T E X T E N T I T I S A S A V I N G S O B J E C T I V E F O R Y O U

.

Retirement

Paying down debt

Saving for unexpected expenses apart from health care

Saving for health care expenses

A major purchase or expenditure at some point in the future

A child’s education 62% 40% 40% 26% 31% 29% 25% 63% 24% 15% 22% 12% Total 65+

F

I G U R E

6 : Q . - H

O W M U C H AT T E N T I O N D O YO U PAY TO E A C H O F T H E F O L LOW I N G A S P E C T S O F YO U R

(401(

K

)/403(

B

)/457 )

P L A N

?

Your balance

How well each of your funds is performing

How your account is allocated among different types of investments

How much income your account might generate for you in retirement

Information on the investment and administrative fees you pay

41% 56% 28% 40% 25% 31% 21% 35% 19% 24% Total 50-64

More encouraging, commitment to the importance of saving for retirement remains remarkably strong, even among younger participants – 62% of all participants say it is a major savings objective, rising to 87% among those ages 50-64. Of note, among those age

65+, still in the workforce and contributing to a DC plan, there is a dramatic shift in savings objectives, with funding health care expenses replacing retirement as the single most important objective (see Figure 5, top, on previous page). In monitoring various aspects of their DC plan, participants pay the greatest attention to their account balances and fund performance while paying least attention to the fees they pay. We imagine that attention paid to fees will increase in 2012 after implementation of new participant-level fee disclosure regulations. Unsurprisingly, those ages 50-64 pay more attention to everything with the biggest bump coming to the retirement income potential of their plan balances (see Figure 6, bottom, on previous page).

Across the board, participants expect their DC plan to represent the most important source of anticipated retirement income – that is highest among 401(k) participants, characterized by limited defined benefit (DB) plan coverage, and lowest among 457 participants with more extensive DB coverage from their public sector employers (but even 457 participants expect a greater share of retirement income from their DC plan(s) than DB plans (see Figure 7, top, left). On average, participants are expecting to replace 80% of their working income in retirement, in line with the replacement ratio often used as a rule of thumb guideline by financial advisers (see Figure 8, bottom, left). Ominously, only 17% are “very confident” that they will achieve that ratio. Some 20% of participants would be very interested in directing at least part of their DC plan contributions toward generating future guaranteed income. There is greater interest among 401(k) participants, i.e., those without a DB plan (see Figure 9, top, next page).

Total 401(k) 403(b) 457

% % % %

401(k)/403(b)/457 plan or other type of tax deferred defined contribution retirement savings plan provided

through your workplace 35 36 31 29

Social Security 22 23 17 13

Income from personal savings, inc.

Individual Retirement Accounts (IRAs) 14 15 9 7 Earnings from employment, inc.

self-employment 10 9 12 15

Defined benefit pension plan, inc.

cash balance plans 6 4 16 19

Fixed or variable annuities you

purchased yourself 4 4 3 2

Income from an inheritance 3 3 3 1

Other retirement plans provided

through your workplace 3 2 7 11

Income from the sale of your

primary residence 2 2 1 1

F

IGURE

7: Q.-A

PPROXIMATELY WHAT PERCENTAGE OF YOUR HOUSEHOLD INCOME IN THE FIRST FIVE YE ARS YOU ARE RETIRED DO YOU E XPECT THIS SOURCE TO PROVIDE

?

Total 18-34 35-49 50-64 65+ Average Target Retirement Income ($ in thousands) $84 $85 $88 $75 $82 Average Household Income ($ in thousands) $105 $93 $110 $108 $137 Replacement Ratio 80% 91% 80% 69% 60%

F

IGURE

8: Q.-T

HINKING RE ALISTICALLY

,

IN TODAY

’

S DOLL ARS

,

WHAT WOULD YOU LIKE YOUR HOUSEHOLD INCOME TO BE IN RETIREMENT

?

Interest in an in-plan guaranteed income feature is not much affected when told that there is a significant extra cost, in this case 1% of account value. Interest is greatest among lower income participants and declines with rising household income. Curiously, interest is greatest among mid-career participants and declines with age (and proximity to retirement). Several observers have hypothesized that this phenomenon might be due to the greater availability with increasing age of a meaningful DB plan benefit, be that an active plan with a current employer, a frozen plan or a legacy plan with a former employer, however, the data do not bear this out, suggesting an alternative hypothesis: that the closer one gets to retirement the harder and more clear-headed one thinks about these things, leading to the conclusion that the appeal of purchasing guaranteed income within the DC plan holds up less well under a more critical look (see Figure 10, bottom, right).I

For more information visit our website at www.brightworkpartners.com or contact Ronald Bush, [email protected], or 203-487-2000.

Endnote:

1 EBRI, 2009 data

2 Current Population Survey, 2009

© 2012 Retirement Income Industry Association® 43

F

IGURE

9: Q.-H

OW INTERESTED WOULD YOU BE IN CONTRIBUTING TO AN INVESTMENT OPTION WITHIN YOUR

(401(

K

)/403(

B

)/457)

PL AN THAT INSTE AD OF ACCUMUL ATING AN ASSET BAL ANCE FOCUSES MAINLY ON GENERATING A GUARANTEED MONTHLY INCOME IN RETIREMENT

?

F

IGURE

10: Q.-H

OW INTERESTED WOULD YOU BE IN CONTRIBUTING TO AN INVESTMENT OPTION WITHIN YOUR

(401(

K

)/403(

B

)/457)

PL AN THAT INSTE AD OF ACCUMUL ATING AN ASSET BAL ANCE FOCUSES MAINLY ON GENERATING A GUARANTEED MONTHLY INCOME IN RETIREMENT

?

7% 21% 52% 20%

7% 21% 51% 22%

8% 24% 51% 17%

11% 15% 63% 11%

Not interested at all Not very interested Somewhat interested Very interested

Total 401(k) 403(b 457 7% 21% 52% 20% 4% 24% 53% 19% 8% 16% 52% 24% 5% 27% 53% 15% 57% 17% 16% 10% 6% 20% 52% 22% 10% 26% 49% 15%

Not interested at all Not very interested Somewhat interested Very interested

Total 18-34 35-49 50-64 65+ < 50 50+

2012 Fall Conference:

In document Tema I. El número real ( ) (página 33-38)