According to a recent study by Irish Life, one of the largest participants in the Irish retirement industry, 90% of Irish workers are not on track with their retirement savings. Boy, if that doesn’t sound familiar. Here’s the scary part – Irish Life is advising clients that they need to have saved enough to replace annually one-third of their salary, which doesn’t seem nearly enough for the average worker, as the “rule of thumb” in the U.S. is to replace at least 50% of one’s final salary.
The fact that 90% of Irish workers can’t replace even 30% of their compensation should truly concern the powers that be in Ireland, as the lack of financial wherewithal will negatively impact Ireland’s economy going forward. One of the key findings by Irish Life was the fact that the average worker only begins saving for retirement at age 37, and this delay is significantly reducing the potential accumulated wealth.
Auto-enroll and auto-escalate features would certainly help the average worker but in many cases, it is the lack of wage growth that is restraining employees from participating to the extent that they should. We are certainly seeing that in the U.S.