More than half of the respondents to a new consumer survey by the ING Retirement Research Institute released Wednesday said they would be motivated to save more for retirement if they discovered that their nest eggs didn't measure up to those of their peers.
Well, have we got a web-based tool for them: INGCompareMe.com. The free tool allows users to compare themselves to others on a wide range of saving, spending investment, debt and personal finance matters. Maybe we could turn it into a reality TV show. Just think of the possibilities: Jersey Shore meets The Housewives of Beverly Hills with a bit of The Amazing Race thrown in for good measure.
“From restaurant reviews to healthcare referrals, consumers are increasingly scanning the social landscape for peer information and validation,” said Patrick Kennedy, chief marketing officer for ING U.S. Retirement. “People are curious how they stack up to their counterparts and a tool like INGCompareMe.com can provide a helpful benchmark.”
Leveraging this data from its peer comparison tool, ING U.S. developed the ING State of Savings interactive map (www.INGStateofSavings.com). It provides a state-by-state scan and ranking of how Americans say they are saving across the country, based on two different benchmarks.
One formula measures the average amount that residents of each state have collectively saved for retirement as a percentage of their total estimated needs, with adjustments made for age. For example, if Sam, who estimates he'll need $1 million for retirement, has current savings of $420,000 and has reached his retirement date of age 65, his “savings progress” is 42%. Bu if Sam had the same estimated retirement needs and current savings but still has half of his saving years ahead of him, his saving progress would be twice that level -- 84%.
Residents of Hawaii top the “savings progress” measure at 51%, followed by New Yorkers (49%) and citizens of the Silver State of Nevada (48%). The bottom three states in the “savings progress” rankings are South Dakota at 19%, followed by Utah (23%) and North Dakota (285).
A second formula measures the “savings score” based on the average amount residents have saved for retirement as a multiple of their annual income. For example, if Judy makes $50,000 a year and has $125,000 in retirement savings, her “savings score” is 2.50 ($125,000/$50,000 = 2.50).
New Mexico topped the “savings score” rankings with 4.56, followed by Vermont (4.35) and South Carolina (3.78). At the bottom of the list was Delaware, with a “savings score” of just 1.23, followed by Rhode Island (1.47) and Mississippi (1.49).
“Through this research and analysis, our goal is to offer Americans another thought-provoking benchmark for retirement savings,” said Kennedy. “As the responsibility to self-fund retirement continues to increase, individuals must find ways to improve their level of financial education, awareness and readiness,” he added.
Vermonters are more likely to seek the help of a financial adviser, according to the survey, followed by residents of New Hampshire and Idaho. On the flip side, Montana residents tend to be do-it-yourselfers when it comes to personal finance decisions, followed by folks in Mississippi and North Dakota.