The Retirement Equation

TOTAL CONTRIBUTIONS  +  INVESTMENT GAINS  –  WITHDRAWALS  =  BALANCE AT RETIREMENT

A 2014 study by MFS surveyed 1,000 defined contribution plan participants in the U.S. between the ages of 20 and 69 who are employed and have at least a $1,000 balance in a plan with their current employer. They asked questions about total contributions, investment gains and withdrawals.

Total Contributions

Participant perspective: Amount needed to save for retirement.

Most participants see $1 million in retirement savings as enough to live comfortably in retirement; 68% believe this amount is enough or more than enough.

Saving $1 million for retirement at age 65, would give you:

Retirement Savings, Happy Retirement, Saving $1 Million for Retirement, Retirement Preparedness

Investment Gains

Participant perspective: Importance of returns.

Participants see returns as having a major positive impact on their plan balance but don’t understand the importance of timing returns.

Withdrawals

Half of participants who take 401(k) loans use them to pay off debt. Nearly one-quarter of borrowers say they had other options, yet tapped their 401(k) anyway.

Loans were used for:

401(k) Loans, Debt, Retirement Savings

ssssThis article is an excerpt from MFS’ white paper, The Retirement Equation. Results of MFS’ 2014 DC Pulse Survey.


ACR#138133 02/15