Results from a recent survey released by Wells Fargo reveal some troubling statistics about how people are approaching their retirement planning. Less than one-fifth of the respondents (16%) said that saving for retirement is a key concern, and 75% said that their calculations for retirement savings are based on some sort of guess.
The annual Wells Fargo Retirement Survey is a telephone survey conducted on 1,000 middle class Americans ranging in age from 25 to 75. The interviews were conducted between July 9 and September 4 and only included respondents who fell within specified income and wealth brackets in order to explicitly target middle class Americans.
The survey results indicated that the most important day-to-day activities for the individuals interviewed is paying the monthly bills, while retirement planning came in second place.
30% said that they would need to work until “at least 80” in order to live comfortably in retirement which is up from 25% one year ago. However, 73% said that their employers would not want them to work in their 80s.
When asked who is primarily responsible for their retirement, 50% of respondents said that it was the individual’s responsibility through saving and investment, 27% said the employer through a pension, and 24% said the government via Social Security. The aspect of individual responsibility varied somewhat based on the individual’s stated political affiliation with 56% of Republicans saying retirement is the individual’s responsibility versus 42% for Democrats.
As for how much of a nest egg they believe will be needed in retirement, the median stated amount was $300,000; however, to date, the individuals responding said they had only saved a median amount of $25,000.
Some additional findings from the survey include:
- 34% said their income in retirement will consist of 50% or less of their current annual income
- 70% said they are not confident in the stock market as a place for investment
- 75% described their calculations for retirement as some sort of a guess, whereas 22% described their planning efforts as detailed and based on “calculations”
- 36% have a written plan for retirement
- If given $5,000 to invest for retirement, 40% said they would invest in a CD or savings account, 24% said stocks, and 22% would opt for gold or precious metals
Speaking on the survey findings, Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust said, “People tell us that retirement preparation should be on their shoulders but they are grappling with the financial pressures of each day. As a result, retirement has become a guessing game. But, people can’t afford to approach twenty plus years of their life by ignoring the facts. People are telling us that times are tough financially – even more so than a year ago — but people also need to take action.”