Even though only a quarter of Americans think their retirement will be better than previous generations’, most are looking forward to it, according to survey results released Monday by Franklin Templeton.
Franklin Templeton surveyed more than 2,000 American adults for the 2014 Retirement Income Strategies and Expectations (RISE) Survey and found 72% said they were looking forward to retirement. However, not only are just 25% of respondents confident that their retirement will be better than their parents,’ 41% actually think it’ll be worse.
“That’s the ultimate contradiction,” Michael Doshier, vice president of retirement marketing for Franklin Templeton, said of a survey where they found many contradictions. He noted that considering the number of different voices Americans hear talking about retirement, it’s not that surprising to find some inconsistency.
“If you take a big step back, there are a lot of forces at play working on people’s heads on this topic,” he told ThinkAdvisor on Tuesday. “We see the obvious stuff about DB plans giving way to DC plans, what’s the future of Social Security — there’s a lot of background noise that probably builds up a lot of anxiety for folks thinking about retirement. In general, seeing this erosion of confidence is not surprising.”
He added that Americans have a tendency to be optimistic, even when there are forces working against them. “The general optimism of the U.S. population seems almost relentless sometimes. There are other things; we see improvements in people saving in 401(k) plans and you see good market performance — maybe the jobs and economy aren’t what we hoped they would be, but the stock market’s been on a good four-, five-year run. There are a lot of forces, some working for and some working against [respondents’ optimism]. The net is people are still as optimistic as they always are in this country, but there are some cracks in it.”
The majority of respondents, 92%, said they expect retirement expenses to be similar or less than their preretirement expenses. Still, running out of assets is a concern. Almost half said they were worried about outliving their assets, and 39% haven’t even started saving.
That number is “highly influenced” by young people who are just starting out, Doshier said, but it doesn’t explain all of it. Almost three-quarters of people between 18 and 24 said they hadn’t started saving yet, but 42% of the 24- to 34-year-old group and 37% of people between 35 and 44 agreed. One in five people between 65 and 74 and 36% of people over 75 said they haven’t started saving.