The vast majority of Americans, including boomers, have not done what’s necessary to retire comfortably, finds a recent survey by the Employee Benefit Research Institute, Washington.
EBRI’s 16th annual Retirement Confidence Survey shows many Americans have amassed relatively little in retirement savings. As might be expected, boomers have saved the most, but for many, it seems scarcely enough.
The survey finds 31% of those aged 45 to 54 had accumulated less than $10,000 for their retirement, while among those aged 55-plus, 36% reported having set aside less than $10,000.
Among all workers, 39% reported having accumulated less than that, although many have considerably more nest egg building years left than the average boomer.
Only 23% of those aged 45 to 54 had set aside at least $100,000, and among those aged 55-plus, 38% had done so.
The general drift of the study, regardless of age group, is that few have saved adequately for retirement. In fact, many have never actually tried to figure out how much they’d need once they retire, according to EBRI. It reports that only 42% of active workers have ever tried to calculate how much they needed to save for a comfortable retirement. That number has declined from 53% in 2000, despite the fact that for a large cohort of boomers in the work force, retirement age is looming.
Another reason for the low savings rate appears to be that where workers have taken a stab at how much they need to save, their estimates were generally unrealistically low.
EBRI estimates workers planning their retirement should plan for a retirement income-replacement ratio of at least 70% of pre-retirement income. And the number expressing confidence in their retirement outlook were flying in the face of recent widely publicized pension plan terminations or limits, EBRI notes.
Among surveyed workers, 30% thought they could get by with less than $250,000, while 19% estimated between $250,000 and $499,999, and 21% estimated $500,000 to $999,000. Another 18% thought they’d need over $1 million. The remainder said they did not know how much they’d need.
Of those who did say they have done a retirement savings calculation, 8% admitted they arrived at their answer by guessing.
It may be a classic example of people in mass denial, but 24% of all those surveyed were very confident they would have enough money to live comfortably in retirement, a number essentially unchanged from a year ago. Another 44% were somewhat confident, up from 40% in 2005.