Despite common belief, Americans are doing a pretty good job of saving and investing for their retirement. And a new report suggests people in San Diego are doing a better job of planning for their financial futures than most other people in the country.
The most recent reading by the Investment Company Institute finds U.S. retirement assets totaled $18.4 trillion at the end of the second quarter in 2011. That is up $70 billion from the same period one year earlier.
Those dollars are distributed evenly between employer-sponsored retirement plans like 401(k)s ($4.7 trillion), IRAs ($4.9 trillion), and the rest held in government and private-sector pension plans.
In addition, personal savings as a percentage of after-tax income is now running at about 3.5 percent, pretty impressive when you consider a few years ago the savings rate was in negative territory.
Saving and investing is one thing. Having a retirement game plan is quite another. A new study by Ameriprise Financial finds just 18 percent of consumers across the country believe they will achieve their dreams in retirement, down from 21 percent last year.
However, the 2011 City Pulse Index of the 30 largest metropolitan areas finds San Diego ranks an impressive No. 3 on the list when consumers were asked if they are prepared for and confident about retirement. Only San Francisco and Sacramento have a higher reading on retirement confidence.
“While San Diego residents are as likely as people in other parts of the country to be taking steps to prepare financially for retirement, locals outpace the residents of other major metropolitans in several important ways," according to the report. "The number who say they've determined the amount of income needed in retirement (35 percent) or the amount they need to save for retirement (26 percent) are both higher than the national average.”
The Ameriprise report also says 75 percent of San Diegans have also planned for at least one activity in retirement. Ensuring they remain healthy tops that list (53 percent), followed by spending more time with family and travel.
And, 22 percent of locals say they have made plans to volunteer during retirement, compared to only 13 percent of those surveyed nationwide.
However, people in San Diego have some serious concerns. The number of San Diego residents who reported a career setback or layoff in the past 18 months increased to 27 percent this year, significantly higher than 17 percent in 2010 and higher than the national average of 19 percent.
Perhaps one of the most positive readings in the study is evidence that people who live here want to retire here. Two-thirds of residents (66 percent) plan to call San Diego home after they finish working and segue into retirement. The locals give the city high marks for weather, health care options and facilities, entertainment options, and, believe it or not, home values.
Other studies recently have shown that most Americans, if they had the choice, would like to live in San Diego rather than the current place they reside. Only New York topped San Diego in that report.
Bottom line, congratulations, San Diego, for doing a good job of planning for retirement. Of course, there is plenty of room for improvement, and there isn't a better time than now to get started.