Fewer Americans Saving for Retirement
Americans are approaching retirement with a combination of inadequate savings and unrealistic expectations about their standard of living after they quit working, according to a new survey.
Although fewer Americans are saving and planning for retirement in 2002 than in the past, 70% said they were very or somewhat confident that they would have enough savings to live comfortably, according to the annual Retirement Confidence Survey by the Employee Benefit Research Institute. That was up from 63% who were confident about their retirement prospects in 2001.
At the same time, the survey found that 67% of Americans have some retirement savings, down from 70% in 2000.
The survey results were released on the eve of the National Summit on Retirement Savings--a Washington confab required by a 1997 federal law called Savings are Vital to Everyone’s Retirement. The EBRI survey found that almost half of all workers have saved less than $50,000 for retirement, and 15% say they’ve saved nothing. Less than one-third have even tried to figure out how much money they’ll need to retire.
About 44% of those surveyed expect that their personal savings will be their biggest source of income in retirement.
The EBRI survey was conducted in January through a telephone poll of more than 1,000 Americans age 25 and older. The margin for error is 3 percentage points.
Savings rates vary dramatically based on personality type, said Dallas Salisbury, president of the Washington-based institute.
About 43% of the population fall into “saver” and “planner” types, who are far more likely to have substantial amounts set aside for retirement, according to the survey. The remainder is hampered by either impulsive spending, financial setbacks or denial.
“It’s important that we continue to develop savings tools and messages that reach out not only to individuals of different ages, but also to those in other specific categories, such as lower-income workers, women or even those who work for small employers that do not offer retirement plans,” said Don Blandin, president of the American Savings Education Council.
These and other topics will be on the agenda at the savers summit, which starts Thursday in Washington.
The first summit, held in 1998, concluded that government and industry needed to do a better job of informing the public about the importance of saving and about the tools available to help.
This year’s summit will feature speeches by President Bush and Labor Secretary Elaine Chao, but will be largely devoted to creating generational “action plans” aimed at boosting savings in every age group.
