My company uses John Hancock for our 401k. I would say that the funds available to invest in are "ok" (it's hard to beat Vanguard IMO), but the company is so generous with matching that it's a great program. Over the nine years that I've worked here this has now become my largest retirement account, and that includes one Vanguard IRA that contains rollovers from TWO previous 401ks!
I have both my contributions and investments on auto-pilot (as you might imagine) and I put in the maximum amount each year. I check the account once a month to see the shares purchased and the price paid for them, then put that info into Quicken (some (all?) John Hancock funds don't have stock symbols to pull updates automatically via Quicken like Vanguard does). And that's about all I do investment-wise when it comes to my 401k.
But last month I did linger a bit on the John Hancock site. They had a link that said something like "see how you're prepared for retirement". I was curious about what they had to say, so I clicked the link and was given this summary:
Based on what we know about you and your current savings, we estimate that when you retire, your retirement savings will provide you with an income of: $127,131.00 per year, or $10,594.00 per month.
We've estimated your retirement income based on the following factors:
- Retirement age - Your retirement income depends on how many years your money is invested before you retire, and how long you will spend in retirement. The age at which you retire has a bearing on all of these factors. We have estimated your retirement age according to the age at which you become eligible to receive full Social Security benefits.
- Contribution level - Your contributions add up! We've calculated your projected retirement income based on your current contribution level.
- Rate of return - Your rate of return - the percentage your account gains or loses - depends on your risk strategy. We've calculated your projected retirement income based on a Balanced strategy using an assumed rate of return of 4.32 %.
- Social Security - We've estimated your expected Social Security benefits based on information provided by the Social Security Administration. Social Security will likely not provide enough retirement income for you to live on.
This projected retirement income figure shows how much money we think you will have when you retire. This is different from what you think you might need to live the lifestyle you want. We can help you calculate a retirement goal that will tell you how much to save, and we'll help you develop an action plan to get you there.
I didn't go any further with the findings than this simple report, but I found this interesting. A few thoughts:
- Retirement age -- They are assuming that I retire at 67. That's almost 20 years away! Yikes!!! I hope to be long retired before then.
- Contribution level -- As I said, I'm maxing out my contributions now. So they are assuming I'll keep doing the same -- and for 20 more years! Yes, I would be fairly well off at that pace.
- Rate of return -- 4.32% seems a bit low to me. I think there's some upside room here.
- Social Security -- I loved this comment: "Social Security will likely not provide enough retirement income for you to live on." Ha! Really? :)
- Calculate how much you will need -- Two things they don't really know that would greatly impact their findings: 1) how much I have saved in non-John Hancock accounts (which is the vast majority of what I own) and 2) what my living expenses are (which are far below my income.) They admit this (in part), so I'm not criticizing them, just pointing out the facts.
I've talked a lot about retirement the past few years. You all know that I have a basic retirement plan established. However, I also have (at least in my mind) an early semi-retirement plan that involves a balance between work and retirement as a transition phase before I fully retire. And when I do retire for good, I want to be sure my retirement is very safe -- that I can live off the earnings of my savings and not have to spend a penny of the principal. This is one reason I've gotten into rental real estate.
What about you? Are any of you close to retirement -- or just dreaming of the day?
Dreaming, for sure! Although for me retirement is still 10-15 years away. I plan on Waiting until I'm 60 at least, mainly because 1) I still have to get the kids thru college, and 2) I'm a woman with the usual high life expectancy so I have to be careful not to retire too soon. I am also planning on hopefully increasing my cost of living when I retire...so I have to take that into account also.
Posted by: Mc | March 20, 2013 at 10:08 AM
I am only in my mid twenties so 30 to 40 years seems very far away. Our employer uses Wells Fargo and I thought I would hate.them but their fees are.low and their.investment options are decent. They have a calculator that lets.you put outside retirement accounts and contributions in but they don't let you play with some of the variables I would like to change in their assumptions.
Posted by: Lance at Money Life and More | March 20, 2013 at 10:30 AM
Definitely only dreaming of retirement at this point. We're working on building up rental cash flow. Currently between all of our various investments we pull in about $2k a month in cash income, plus a decent amount of principal reduction. We've really only been focusing on income investments in the past 3 years, so it's conceivable that within 5 years we could live comfortably (if not extravagantly) on income from investments. But I'd say it's very unlikely that we would both leave our day jobs at age 34.
Posted by: Jonathan | March 20, 2013 at 12:05 PM
While I'm responsible about saving for retirement, I'm definitely not "dreaming" about it. I really love my job and can't see retiring anytime before 65. I may even go longer if I am still passionate about my job and as family genes go well into the high 80s and 90s.
Posted by: Noah | March 20, 2013 at 03:13 PM
We have Fidelity which is OK but I do like Vanguard better for my roll over IRA and Roth.
I find the calculators well comical. I input the info into Vanguard and they say I am on track. I input the info in Fidelity and they say there is a little room for imporvement.
So who do you believe.
I say I am on the best track that I can afford at the time with all the expenses I have. It is what it will be.
Posted by: Matt | March 20, 2013 at 04:48 PM