Retirement Savings Lag Benchmarks

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Data from late 2007 shows fewer than one-third of surveyed workers have retirement savings on track to reach ten times final pay at age 65, a level recommended by retirement industry experts.

Experts say retirement account balances of 10 times final annual pay will produce adequate income for retirement at age 65. Recent data shows 401(k) and IRA balances are falling short of this standard.

The Pudding Index™ website, created by Pinpoint Performance, Inc., compares a worker's retirement savings balances to a benchmark amount tied to the worker's age and pay level. The benchmark value increases over time and reaches 7.1 times annual pay at age 65.

Website visitors are graded on how well their retirement savings compare to benchmark amounts. A Pudding Score of 100 or more says retirement assets are ahead of the index level; a lower score says savings trail the index's pace.

Multiplying the Pudding Score by 0.70 yields the score that would apply if the final Pudding Index™ target were 10 times pay at age 65.

Pinpoint analyzed Pudding Score data from late 2007 for 620 people. The data showed just 50 percent are ahead of the Pudding Index™ benchmark. Worse yet, only 28 percent are on track if a "10 times pay" standard is applied to the group (or just to workers over age 50).

"These results show weakness for individuals who depend solely on defined contribution retirement programs to supplement Social Security," said Bill Glasco of Pinpoint Performance. "Employees age 50 and above are more likely to participate in a defined benefit pension plan, so they may fare better than this data suggests."

"The surveyed group consists of people who have saved for retirement and taken the initiative to obtain their Pudding Scores -- a group that will score higher than the overall workforce," said Glasco.

The Pudding Index™ is located at: The site's name derives from "the proof is in the pudding."

Pinpoint Performance
Bill Glasco, President

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