Americans Keep Pushing Off Retirement Plans

In addition to the sin of starting too late, the other retirement planning issue that plagues many Americans is a lack of awareness on what they need to act on, or where they need to invest.

“When you ask a question as simple as, ‘Have you done some sort of calculation of how much money you’re be needing in retirement,’ half the people say they have never done that, so it really looks like people aren’t thinking much about retirement,” said Craig Copeland, a research analyst with the Employee Benefits Research Institute. “When they’re thinking about finances, they’re thinking about how to get through this year, not—especially if they’re in their 30s—how do you get through 30 years later.”

A non-profit research organization based in Washington DC, the Employee Benefits Research Institute has been studying consumer confidence in retirement planning for a few years, and the results are never encouraging. Consider another statistic from the recent Confidence study: only 23% of survey respondents said they felt they were doing a good job of financially planning for retirement.

“In some cases, maybe their parents have done pretty well on Social Security, or their grandparents have,” Copeland said. “But things have changed. And unfortunately, people don’t really understand the Social Security system and how it works.”

Individuals counting on Social Security alone today may be in for the shock of their lives.

But there is some good news in all of this. For one, the problem is getting noticed. As noted in the recent report “HR’s Role in Preparing Workers for Retirement,” published by the Society for Human Resource Managers (SHRM), “Evidence is mounting that many Americans are unprepared financially for their retirement. New data shows that HHR professionals and employers are becoming increasingly aware of the problem, and they are giving workers more guidance and options for their eventual departure from the labor force.”

That fact is confirmed by recent data from the U.S. Census Bureau that revealed that the number of employers that are offering a sponsored pension or retirement plan is up slightly in 2013 from a year ago, from 59% to 61%.

But again, not enough workers are taking advantage of those offerings. According to the Census Bureau data, among workers that have retirement plans available, 46% partake in them. That number rose only 1% in the past year, from 45% to 46%. Even more discourage, it is down from 10 years ago, when those participating was 48%.

Source: The Street