10X Income Touted for Retirement Savings

BOSTON (MainStreet) -- When it comes to retirement planning, a familiar (and often daunting) question is how much you need to save.

As part of during National Save for Retirement Week, Lincoln Financial Group (Stock Quote: LNC) is hosting an hourlong open forum Thursday, Oct. 20, at 12:30 p.m. ET on retirement saving on its Facebook site. Its retirement plan specialists will answer questions in real time, and savings targets are likely to be among the hot topics.

Anna Gauthier, strategic communications director at Lincoln Financial, will come armed to the chat with its recent Retirement Power study, a look at the savings profiles and behaviors of more than 4,000 respondents, including in-depth analysis of a subgroup of 1,179 retirees.

According to research by Hearts & Wallets, a firm that analyzes retirement market trends for the financial services industry that is cited in the study, only 11% of leading-edge baby boomers (ages 53-64) have saved at least $500,000, even though only 30% of the same group expected to have any income at all from a traditional defined-benefit pension plan. It also found that 50% of respondents consider retirement planning -- including how much to save -- to be "difficult" or "very difficult."

Using the study, Lincoln is suggesting that people should aim to have a savings baseline of at least 10 times their annual income at retirement. In greater detail, the assets-to-income metric it suggests should be calculated by dividing the sum of an individual's current investable assets (minus nonmortgage debt) by their current annual pretax income.

According to Gauthier, 10X is a baseline goal that can serve as a "talking point and conversation starter" for retirement planning. Personal financial planning is still necessary, as retirement income needs will vary from one individual to another.

Among respondents to Lincoln's survey, only 11% of retirees have reached the targeted 10X level of savings, something its experts see as a call for individuals to get more serious about setting an assets-to-income ratio as a basis for their retirement planning.