It’s time to worry about your RPM score.
Shorthand “Retirement Preparedness Measure,”It is the best way to determine what your retirement years might look like. “The Great Gatsby”There are more “Les Misérables.”(Trust us, Anne Hathaway will not be there singing “I Dreamed a Dream”(In the second case.) It doesn’t stop there.
This new Fidelity Investments measure is not only the first ever but also includes a number of other benefits.www.fidelity.comThis report reveals how close Americans are in meeting their total post-retirement costs. It also compares how Baby Boomers (Gen Exers) and Gen Yers stack up against one another.
Are you ready for the drum roll?
“The median [RPM] score indicates working Americans are on track to meet just 74 percent of their estimated retirement expense goals,”Housing, food, and health care “and face a 26 percent income gap,”John Sweeney is Fidelity’s executive vice-president of retirement and investment.
This is the median. Also considered “America’s RPM”It is a very good rate “yellow,”For “fair,”The retirement readiness spectrum is color-coded. You can also see the full report. breakdownBased on Fidelity’s 2013 Retirement Savings Assessment Survey data, you will see that only 55 percent of households are ranked. “fair”Or “poor”This is:
* Dark Green (very good or better): 33 percent are on track to cover 95 percent or more of total estimated expenses, even in a down market.
* Green (good): 12 percent are on course to only cover essentials.
* Yellow (fair): 14 percent are coming up short and would likely require modest adjustments to their planned lifestyles.
* Red (poor): 41 percent were so off track that significant lifestyle adjustments would be needed.
Eye-opening are the differences between generations.
The Baby Boomers are still in the “green zone”The reality is that the group is on track for only 81% of their goal, which pretty much means they can’t afford to travel or entertainment. Gen Xers (born 1965-1977) made the difference. “yellow zone”At 71 percent
What about the Gen Yers younger than them who dream of retiring early? These Gen Yers have the best time to improve their current circumstances. “red”Rating of 62 Percent of their goal
They, or anyone else, can increase their retirement readiness by using six “”accelerators”
If you are able to raise your annual savings to 15% of your income, including any employer match, it would bring the median RPM score from 74 to 82. Another option is asset mix. If you replace portfolios that are too conservative or too aggressive, the median RPM will increase to 77.
