The “Great Recession” and economic uncertainty of recent years have darkened expectations about retirement for millions of Americans near the end of their working lives, leaving many convinced they will need to remain in the workforce much longer than originally anticipated, according to poll results announced by the Allstate Corporation and National Journal. 

The 11th quarterly Allstate-National Journal Heartland Monitor Poll explored Americans’ financial situations and attitudes toward retirement. The poll shows the recession has cast a shadow on the plans of “near-retirees” – Baby Boomer Americans age 50 or older who have not yet retired.

On average, near-retirees expect to retire six years later than the age at which current retirees did. More than two-thirds of Baby Boomers (68%) expect to work in some form after retirement – about half say, out of necessity – while only 11% of current retirees report that they work.

“The impact of the recession on the middle class is larger than past recessions. Not only is long-term unemployment at record levels, but Baby Boomers now say they will have to retire six years later than previous retirees,” said Thomas J. Wilson, Allstate chairman, president and chief executive officer.

“Sandwiched between the happily retired and the optimistic young, these near-retirees feel the pain of their declining home values and retirement savings and expect to work until 66 years of age. This profound decline in Baby Boomers’ retirement expectations has significant public policy and private market implications.”

According to the poll, near-retirees have different expectations about the sources of their retirement income and their financial security in retirement than current retirees. Both groups express a similar reliance on Social Security: 68% of retirees say it is a major source of income; 62% of near-retirees expect it to be.

However, more than half (52%) of current retirees cite a pension as a major income source, while only 37% of near-retirees expect the same. Meanwhile, 34% of near-retirees expect part-time work to be a major income source, while only 8% of current retirees report part-time work due to economic necessity. While 79% of current retirees say they’re confident about their retirement security, including 33% who are “very confident,” only 67% of near-retirees say the same, and only 19% say they are “very confident.”

 

“For those approaching retirement, the sense of security expressed by many of today’s retired seniors looks like a ship that is sailing beyond reach,” said Ronald Brownstein, editorial director of National Journal Group. “This survey captures a palpably greater degree of anxiety among near-retirees – families that have been exposed more directly to the battering of the job, housing, and stock markets. Many of them have been paddling so hard to stay above the waves of the Great Recession that they have difficulty imagining a time when they can confidently lay down their oars.”

Key findings from the 11th Allstate-National Journal Heartland Monitor Poll include:

1)    Many Americans feel the pain as the recession continues to be a game-changer – and delays Baby Boomer retirements – while current retirees and younger Americans firmly believe in the retirement promises of the American Dream.

    –  68% of near-retirees say it is very or somewhat likely that they will continue to work in some form. Only 11% of current retirees say they still work.

    –  Only 25% of near-retirees expect their retirement to be more comfortable than their parents’ retirement, and 39% expect it to be less comfortable. 47% of current retirees say their retirement is more comfortable than their parents’ was, and only 19% say it is less comfortable.

    –  Only 27% of near-retirees expect their retirement to be more secure than their parents’ retirement, and 47% expect it to be less secure. 42% of current retirees say their retirement is more secure than their parents’ was, and only 17% say it is less secure.

    –  Near-retirees (Baby Boomers aged 50+ who are not yet retired) expect to retire, on average, at the age of 66. Current retirees retired at 60 on average – which is about when younger Americans (the Millennial generation, ages 18-29) expect to retire.

2)    With the exception of Social Security, near-retirees have different expectations than current retirees about their sources of income and financial security in retirement.

    –  79% of current retirees said they were “very” or “somewhat” confident they have enough money to provide a secure retirement, while only 67% of near-retirees expressed the same level of confidence.

    –  Income from part-time work is a major income source for just 8% of current retirees and is expected to be a major source for 34% of near-retirees.

    –  IRAs are a major income source for 18% of current retirees and are expected to be a major source by 27% of near-retirees.

    –  401(k)s are a major income source for 16% of current retirees and are expected to be a major source by 39% of near-retirees.

    –  A monthly pension is a major income source for 52% of current retirees, but only 37% of near-retirees expect the same.

    –  Social Security is a major income source for 68% of current retirees, and a similar 62% of Baby Boomer near-retirees say they expect it to be a major income source.

3)    Near-retirees overwhelmingly support the traditional Medicare system over a voucher system, including a strong majority of Republicans.

    –  62% support the current Medicare system of direct payments to doctors. Only 17% support conversion of Medicare to a program that provides seniors with a fixed sum of money to purchase their own insurance. 58% of Republican near-retirees support continuation of the current system.

4)    Americans believe that a secure retirement has more to do with their own hard work, savings, and investment than it does with an unpredictable stock market.

    –  30% believe that a secure retirement depends more on events out of their control, such as events that affect the stock market.

    –  63% of Americans believe that a secure retirement depends more on their own actions, such as working hard, saving and investing. This includes a strong majority of retirees (65%), near-retirees (57%), and those 18-49 (65%).

5)    Despite continued economic uncertainty and continued concerns about state of the country, Americans are increasingly more optimistic about America’s long-term prosperity, the direction of the economy and their personal financial situation.

    –  38% of Americans say they would vote to re-elect President Obama, while 53% say they would vote for someone else. This is a slight deterioration from the 41% who would re-elect and 51% who would vote for someone else measured in October and represents a low mark for the president.

    –  President Obama’s approval rating remains at 44%, identical to October, which was the lowest rating in the Heartland Monitor Poll’s history.

    –  On their personal financial situations, Americans are more optimistic than has been measured in the two years over which the Heartland Monitor Poll has tracked this question. A total of 44% say they expect their personal financial situation to improve by this time next year, while 14% say it will get worse.

    –  Americans are more optimistic about the direction of the economy than they were in October. A total of 56% now believe the economy will improve over the next 12 months, compared to 50% in October, and just 36% say it will worsen, compared to 46% in October.

    –  70% of Americans believe that things in the country are “seriously off on the wrong track,” while only 20% believe the country is “headed in the right direction.”