It’s not just the car, décor and vacations that get upgraded to keep up with the Joneses.
A new survey from ING Retirement Research Institute shows people also would increase their retirement savings to compete with their peers’ savings.
According to the survey of U.S.-based consumers, more than half said they would save more for retirement if their current savings wasn’t on par with their peers. The survey also showed that people used the size of their retirement savings more so than material possessions and salary when gauging themselves against others.
“We live in a world where we buy services through Amazon.com and look at the opinions of our peers,” says Patrick Kennedy, head of marketing and advice services for ING U.S. Retirement. “People are driven by peer comparisons.”
The survey also found that even in retirement, people still care what their peers are doing : 19% saying they want to keep up with others when it comes to the quality of their life and their financial independence.
Kennedy says that tracking other people’s retirement plans may not motivate people to increase their savings, it will prompt them to ask more questions and seek out more information if they feel their savings don’t stack up.
In 2008, ING ran a peer comparison experiment with more than 28,000 people. One-fifth of participants chose to increase their contributions or joined a plan as a result of knowing where they stood compared to others, says Deb Dupont, director of the ING Retirement Research Institute.
It’s not exactly polite to ask someone how much they’ve stowed away, but there are tools that can help provide a benchmark. INGCompareMe.com lets consumers compare their retirement savings, debt levels and spending habits to their peers to gauge where they stand.
“The biggest thing with these tools is its thought provoking,” says Kennedy. “The first step is to recognize that they may need help.”
Since the INGCompareMe.com site debuted in 2009, more than 1.8 million people have visited the site and about 60,000 answered questions about where they live, how much they earn, the amount they’ve saved for retirement and the anticipated amount they’ll need to live comfortably in retirement. Based on this data, ING U.S. was able to develop the ING State of Savings interactive map, which gives users a state-by-state comparison and ranking of how Americans are saving across the country.
So which states are saving the most? According to ING, which measures the so-called savings progress of a state, Hawaii, New York and Nevada are home to residents reporting saving the most. In Hawaii, residents have saved 51% of their estimated needs for retirement while New York residents have cobbled together 49% of their nest egg. Nevada is a close third with 48%. According to ING USA, the national average for savings progress is 39%.
As for which states have saved up the most, New Mexico came in at first place with residents saving 4.56 times their annual income. Vermont was second with 4.35 times and South Carolina was third with 3.78 times. According to ING USA, the national the average for savings is 2.42.