Pity those poor Goldman Sachs (NYSE:GS) employees. Despite the popular notion that riches are lavished on them, workers at Wall Street's leading investment bank have only 86% of the assets they will need to maintain their lifestyles in retirement. At Citigroup (NYSE:C), things are even worse, with workers there having only 63% of what they'll need. United Airlines' pilots, by contrast, have more than double what they'll require to make their golden years truly golden.

The 401(k) Fee Fiasco
How To Avoid Costly IRA Mistakes
Caterpillar Suit Could Lower 401(k) Fees

Those are some of the findings of a retirement readiness index being released Monday by Fiduciary Benchmarks, a firm that benchmarks retirement plans, such as 401(k)s, and compares them with plans offered elsewhere.

For its study, the Kansas City, Mo., firm looked at 21,000 corporate retirement plans in 100 industries, each with a minimum of $10 million in assets.

Among the surprising findings: In terms of maintaining lifestyles in retirement, workers in the food industry may be in better shape than investment bankers. Employees at Kraft Foods (NYSE:KFT) on average have 118% of what they'll need to maintain their pre-retirement lifestyles after quitting work, and those at ConAgra Foods (NYSE:CAG) have 134%.

"If you don't know what your readiness is, here's a good starting point," says Tom Kmak, chief executive officer of Fiduciary Benchmarks.

To determine whether a person is ready to retire, the company constructed a Replacement Ratio Study based on work by benefits consultant Aon Consulting (NYSE:AOC) and Georgia State University. The amount needed in retirement varies from 94% of income for someone earning $20,000 a year just prior to retiring to 77% of income for someone earning $80,000. Someone with annual pre-retirement income of $250,000 will need 88% of that amount annually after quitting work to maintain his living standard, under a methodology developed by Aon. The ratios were calculated by factoring in gross pre-retirement income and for pre-retirement taxes, savings, estimated changes in expenditures at retirement and post-retirement taxes.

Because the study's objective was to gauge readiness to maintain pre-retirement standards of living, the absolute amounts that workers in various industries have saved, and will have available in retirement, vary widely.

One of the key factors in determining whether an industry's employees will be prepared to maintain standards of living in retirement are its profit margins, Kmak says. The reason is that businesses with higher profit margins tend to make higher contributions to employer retirement plans.

Kmak cautions that the study's findings should be viewed as a starting point. People working in transportation equipment management companies, such as Rolls Royce North America (OTC:RYCEY), are on average 98% ready for retirement, while employees at hospital companies are only 73% ready, according to Fiduciary Benchmarks.

This doesn't mean a longtime nurse should quit and move into the transportation business. Rather, it means the nurses should evaluate their retirement readiness and make changes as needed, Kmak said. Among the ways to improve retirement readiness are to delay retirement and contribute more to retirement plans, such as company-sponsored 401(k)s and Individual Retirement Accounts.

What's more, workers in the same industry sometimes show wide gaps in retirement readiness. Pilots at UAL Corp.'s United Airlines, for example, have an average of 219% of what they'll need to retire comfortably, while their flight attendant colleagues have only 79%, the study found.

Related Articles
  1. Retirement

    4 Roth IRAs with the Lowest Expense Ratios

    Discover why funds with low expense ratios are important for retirement portfolios, and find out about some of the lowest cost options available for a Roth IRA.
  2. Retirement

    Roth 401(k), 403(b): Which Is Right for You?

    Learn how to decide between a traditional or Roth version of the 401(k), 403(b) or 457(b) retirement plans to help you build your nest egg.
  3. Retirement

    Going Back to Ecuador to Retire: A How-to Guide

    Spending your retirement years in Ecuador can be an affordable and attractive proposition, provided you know the country's laws.
  4. Personal Finance

    The Ten Commandments of Personal Finance

    Here are the simple financial Ten Commandments that, when faithfully followed, can lead to a secure economic future.
  5. Retirement

    5 Reasons to Start a Business After You Retire

    It can be beneficial in any number of ways: mentally, occupationally and even financially.
  6. Investing Basics

    Fee-Only Financial Advisors: What You Need To Know

    Are you considering hiring a fee-only financial advisor or one who is compensated via commissions? Read this first.
  7. Retirement

    How Much Money Do You Need to Retire at 56?

    Who wouldn't want to retire early and enjoy the good life? The question is, "How much will it cost?" Here's a quick and dirty way to get an answer.
  8. Retirement

    The Best Strategies to Maximize Your Roth IRA

    If a Roth IRA makes sense for you, here are ways to build the biggest nest egg possible with it.
  9. Retirement

    Suddenly Pushed into Retirement, How to Handle the Transition

    Adjusting to retirement can be challenging, but when it happens unexpectedly it can be downright difficult. Thankfully there are ways to successfully transition.
  10. Investing

    What a Family Tradition Taught Me About Investing

    We share some lessons from friends and family on saving money and planning for retirement.
  1. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  2. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  3. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>
  4. Can catch-up contributions be matched?

    Depending on the terms of your plan, catch-up contributions you make to 401(k)s or other qualified retirement savings plans ... Read Full Answer >>
  5. Are catch-up contributions included in actual deferral percentage (ADP) testing?

    Though the Internal Revenue Service (IRS) carefully scrutinizes the contributions of highly compensated employees (HCEs) ... Read Full Answer >>
  6. Who offers 401(k) plans?

    401(k) plans are one of the most common retirement plans available. A 401(k) plan must be offered by a business. These plans ... Read Full Answer >>

You May Also Like

Trading Center