If they want to save enough for a comfortable retirement, nearly half of Americans concede the likelihood of being tied to the cubicle longer than expected. Is that a reasonable assumption? Can they do so? Perhaps not, according to a recent survey.
A study by PNC Financial Services Group Inc. found that 49 percent of Americans in their “prime retirement planning years” intend to work longer than expected to shore up their retirement accounts. However, more than half — 58 percent — of those 70 and under who have already left the workforce did so sooner than planned.
The reasons range from health issues (40 percent) and employment changes (26 percent). Typically, those employment changes involved forced early retirement or a layoff.
PNC polled 1,200 adults between the ages of 35 and 70 to ascertain retirement preparation attitudes. The nationwide survey was conducted in July.
A spokesperson for PNC says that the term “prime retirement planning years” is subjective. By surveying people between those ages, “we figured most were either thinking retirement planning, about to retire or already retired,” he said.
Celandra Deane-Bess, CFP, vice president and senior wealth planner with PNC, noted in a statement that the results indicate the decision to retire is not always within the control of the individual. “Economic uncertainty, employer actions and unexpected health issues often force individuals to retire earlier than expected, which puts a premium on sound financial habits early,” she stated.
So, how are Americans planning for retirement? The PNC survey segments the respondents into three categories:
- Planners: This group comprised about 42 percent of those polled. They consider themselves on track in their preparation for retirement.
- Procrastinators: Making up 35 percent, they recognize the need to prepare but admit they have not taken the steps to do so yet.
- Avoiders: About 23 percent acknowledge they are well behind on their retirement planning.
Whichever group they belong to has a significant impact on their retirement prep, the study uncovered. For instance, 79 percent of the planners participate in their employer-sponsored retirement plan, compared to just 39 percent of the avoiders. Further, on average, the planners target a retirement age of 65.7 years, while the a+voiders expect to retire at 68.2.