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7 habits of confident retirees

By Jennie L. Phipps · Bankrate.com
Thursday, September 20, 2012
Posted: 3 pm ET

Here are the "Seven Essential Habits of Highly Confident Retirees."

They are culled from BlackRock Investments' survey of retirees from companies for which BlackRock manages 401(k) plans.

BlackRock focused on respondents who considered themselves "very confident" that their retirement income would be there as long as they needed it. Here's what BlackRock found is right about these savers' retirement planning, followed by the percentage of respondents who adopted these habits:

  1. Increased retirement savings whenever they were able: 90 percent.
  2. Made the most of their 401(k) plan, possibly including maxing out the  employer match: 87 percent.
  3. Estimated their income needs before they retired: 84 percent.
  4. Regularly reviewed their savings strategy: 83 percent.
  5. Changed their mix of investments as they got older: 79 percent.
  6. Started saving early in their work life: 77 percent.
  7. Saved the maximum amount of money permitted by their 401(k) plan: 73 percent.

BlackRock did this survey to help its own clients, who are mostly large employers, strengthen the retirement plans these firms offer employees. It summarized the findings by offering some suggestions that help employees get the most out of the plans available to them. Even if your employer didn't get this message, you can still follow these pieces of advice from BlackRock.

Talk to retirees. Identify retirees you believe are managing their retirement well. Ask for their advice. What are they doing right? What would they have done differently?

Add a secure income option. BlackRock found that retirees who also had an old-fashioned defined benefit pension were more likely to feel confident than those who didn't. It recommended that retirees who don't have a pension should consider putting some of their savings into an annuity or other guaranteed income plan.

Make it automatic. If your employer offers the option of automatic savings increases, sign up for them. You won't miss what you never had.

Re-evaluate target date funds. Many 401(k) plans are making target date funds the default savings option, but as BlackRock says, "Not all target date funds are created equal." If yours isn't performing well or the expense rate is high, switch to something else.

Educate yourself. BlackRock found that the most successful savers -- retired or still working -- are involved in the plan and knowledgeable about investing in general.

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2 Comments
Jernej
October 24, 2012 at 6:52 am

Well your employer has to offer a 401 if yo want to go that way nice and easy money, comes out of your check berofe you even see it.But if no 401 then it's time you got some IRA's under your belt if you got some savings you can put $ 4000. into an IRA..( Traditional if you end up paying at tax time .ROTH, if you don't get hurt too much at tax time)So.. you know how to use a computer, you can go to an outfit like Fidelity, or E-trade and open an account on-line .then do just a little reading about mutual funds at yahoo/finance or Kiplinger's website first- time around get into something called balanced .may have some safety aspects to it All this reading and prep stuff only takes a few days out of your life take the time you won't regret it in 20 years.Anything you don't understand or have trouble with, ASK again..there are a few good people answering here ..you'll do fine.P.S. You can certainly start with less than the $ 4000. but I think that's the most you can add for a few years.

William Bond
September 20, 2012 at 10:49 pm

Successful retirement programs must be monitored, and changed to get the best possible returns year after year. Talking with other employees, to get their ideas is crucial, and continuing to add to your retirement program each payday. Never give up. William Bond Author on Money/Personal Finance