A new study from the Federal Reserve shows that half of Americans surveyed have either given “a little” or no thought at all to preparing for their retirement.
The study, Report on the Economic Well-Being of US Households in 2013, is a consumer survey conducted by the Federal Reserve Board’s Division of Consumer and Community Affairs in September 2013 using a nationally representative online survey panel. Its purpose was to capture a snapshot of the financial and economic well-being of U.S. house- holds and the issues they face.
Some of the findings are indeed rather striking when it comes to the average American’s preparation for the future, from a financial perspective. In addition to the lack of planning for retirement, 45% of respondents also said they did not save any portion of their income. 31% of respondents who are not yet retired reported that they have no retirement savings or pension whatsoever. The lack of saving was magnified by age as well with 50% of workers aged 18-29 reporting no savings or pension compared to only 15% of workers aged 60+.
Younger workers were the most likely to have not planned for retirement in any way: 41% aged 18-29 had not done any planning whereas 40% of workers aged 60 or more had done either a “fair amount” or “a lot” of planning.
Most survey respondents were planning on paying for retirement either with Social Security money or with funds from a retirement account of some sort (IRA, 401k, etc). Younger workers generally expected Social Security to not be a source of income when they reached retirement (the Social Security Trustees recently said in their annual report that the trust fund reserves are projected to be solvent until 2033). Only 20% of workers aged 18-29 said they planned on using Social Security to pay for expenses in retirement whereas 74% of workers aged 60+ said they were going to use it.
Another recent survey generally mirrored the Federal Reserve study, saying that 36% of Americans have not started saving for retirement and more than a quarter of Americans aged 50-64 have yet to begin saving.
How comfortable do you feel about the prospects of your own retirement? Share your thoughts in the comments below.
For more on this topic, see Can You Retire on $25k?.