Fidelity Finds Americans Woefully Unprepared for Retirement

Ellyn McColgan, president of Fidelity Brokerage Company, renewed the call for Americans to get serious about saving for retirement, and urged plan sponsors and advisors to continue helping consumers plan for retirement during a speech at The National Press Club in Washington June 7.

Citing statistics from the recently released Fidelity Retirement Index, a first-of-its-kind survey showing the "retirement readiness" of American households, McColgan said that the typical American household has saved only $18,750 for retirement and is on track to replace only 59% of projected pre-retirement income at retirement. The majority of Americans, she said, are still relying on Social Security and pension benefits to help sustain them through retirement. The retirement index, part of Fidelity's income planning initiative launched last June, is based on a survey of more than 1,900 American households who work fulltime, are older than 25, and earn more than $20,000. Fidelity plans to report findings from its retirement index twice a year.

Fidelity is doing its part to help consumers prepare for their golden years by enhancing a number of retirement-related initiatives the Boston-based fund giant launched last year, McColgan told attendees. Fidelity plans to broaden its year-old Retirement Income Advantage program by making it faster and easier for individuals to develop a comprehensive income plan. This month, Fidelity also plans to add enhanced tools and new retirement-related content to its Fidelity.com and NetBenefits Web sites. An enhanced Retirement Quick Check online guidance tool is also available for Fidelity clients. The tool shows how specific adjustments to savings, expenses, asset allocation, or retirement date could improve a client's chances of retiring comfortably. Since launching the retirement income initiative last year, McColgan said Fidelity has helped 200,000 retirees and pre-retirees develop retirement income plans. As part of Fidelity's Advisor Income Services, which was launched last year, McColgan said Fidelity has held workshops for 15,000 advisors. In a separate interview, McColgan was not ready to comment on whether she has found a replacement for Jay Lanigan, former head of Fidelity Registered Investment Advisor Group (FRAIG), whom she let go a few months ago.