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Americans to financial planners: We need help!

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In the past two days, three surveys have been released that paint a rather bleak picture of Americans’ financial status and expectations about retirement.

Perhaps the most startling finding came from a national survey from Surveying about 1,000 Americans, 23 percent report they had less than $100 in savings to fund an unexpected emergency on a given day, while 46 percent say they have only $800 tucked away in a savings account.

Meanwhile, Aviva USA’s recent Consumer Attitudes to Savings survey pretty much mirrors those results, with only 27 percent revealing they have enough money saved to pay for an unexpected emergency while seven out of 10 report having no savings account at all. Just under half own life insurance and roughly a third hold investments.

About a third of the respondents (32 percent) consider financial planning too complicated for them to do on their own, and almost one in four would like someone else to sort out their financial affairs.

No surprise then that Americans are concerned about their golden years. Nearly six in 10 expect to work beyond retirement age and are worried they won’t have enough saved for an acceptable standard of living in retirement. Strikingly, 17 percent say the only way to ensure they have adequate retirement savings is for it to be required by law.

Commenting on the results in a statement, Matt Spackman, Aviva USA vice president of customer insights and analytics, said that some Americans are “paralyzed” in the face of their financial challenges and consequently do nothing. “It’s surprising that 27 percent of Americans say they do little or no financial planning,” he stated. “And it’s no wonder that two-thirds of Americans say life is more risky than it used to be. Many simply do not have the financial backstops they need to deal with life’s unexpected events or a plan to sustain them in retirement.”

Work in retirement? Maybe not.

Is working in retirement a realistic goal? According to a survey by the Insured Retirement Institute (IRI), 64.4 percent of baby boomers and 70 percent of Gen Xers state that one source of retirement income will be a job. This is part of a longer-term trend, the IRI points out. Citing statistics from the Employee Benefit Research Institute (EBRI), people age 65 and over constituted 17.9 percent of the labor force in 2011, up from 10.7 percent in 1986.

Further, postponing retirement until age 70 has a significant impact on retirement readiness, the IRI reports states.

However, working in one’s golden years may not be feasible, given that many are forced out of the labor force prematurely. When it surveyed retirees this year, IRI found that 50 percent had to leave the workforce earlier than planned. Top reasons included a health issue or disability (51 percent); changes at their employer or downsizing (21 percent); and family caregiving responsibilities (19 percent).

Democrats more optimistic

The Aviva survey asked Americans what direction they thought the economy was headed over the next 12 months and this being an election year, results were split along party affiliation. Democrats and Republicans differed in their views, with 33 percent of Democrats expecting it to get better versus 16 percent of Republicans. Further, Democrats were 50 percent more likely than Republicans to anticipate their own household financial circumstances would improve in the next year.

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