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Retirement Planning > Retirement Investing

Less Than Half of Americans Confident They’ll Reach Their Retirement Goals: AICPA

By Emily Zulz

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Less than half of non-retired Americans are confident they’ll reach their financial goals by retirement, according to a new survey conducted for the American Institute of CPAs.

The survey, which was conducted by telephone among 1,018 adults aged 18 and over between March 24 and 27, found that 46% of non-retired Americans are confident they will reach their retirement goals, compared with 49% who are not confident (29% not sure, 20% don’t think they ever will). The survey sample included 650 adults self-identified as “non-retired” and 322 as “retired.”

Only 5% of non-retired Americans reported that they had already reached their retirement goals.

The study finds that this lack of overall confidence tracks with anxiety about the financial aspects of retirement – with two-in-five non-retired Americans (42%) saying they are either very anxious (14%) or somewhat anxious (29%).

The specific cause of their anxiety ranges from health care costs (71%) and health care uncertainty (68%) to affording everyday expenses and bills (67%), Social Security uncertainty (62%) and uncertainty over tax rates (52%).

In addition, figuring out how much money will be required in retirement (70%) and the overall difficulty of planning for retirement (54%) are causing anxiety for a substantial percentage of non-retired Americans, according to the study.

“Saving for retirement is a marathon, not a sprint. By establishing a monthly budget and starting to build up savings early on, Americans will find themselves in a much better position later on,” Greg Anton, CPA, CGMA, and chair of the AICPA’s National CPA Financial Literacy Commission, said in a statement. “The most important thing people can do in any financial environment is focus on what they can control and understand the role that their actions play in their retirement plan.”

The survey finds that the traditional “three-legged stool” model of retirement planning – Social Security, a pension and personal savings, including 401(k) and IRAs – still holds up among those currently retired.

According to the survey, currently retired Americans cite Social Security (61%), pension plans (36%) or cash or savings accounts (25%) as their top two sources of income in retirement. 

However, this model may be changing for non-retired Americans. The survey finds that anxiety over Social Security and a sharp decrease in company pensions may have led to an increased emphasis on personal savings – leaving the three-legged stool a bit unstable.

For non-retired Americans, the percent who anticipate relying upon Social Security (48%) or a pension plan (17%) as one of their top two primary sources of income differs significantly, with a more likely dependence on cash or savings accounts (39%).

The survey also finds that non-retired Americans are more than three times as likely as those who are retired to say they expect to rely upon a 401(k) (43% vs. 14%) as one of their two primary sources of income during retirement.

“Working throughout your life was once a reliable route to a comfortable, financially secure retirement. Over the years, Americans have been asked to take on more responsibility and become more self-sufficient when it comes to their retirement planning,” Anton said in a statement. “We’ve found that today, even Americans who say they’ll reach their financial goals are anticipating a more active ‘retirement-lite’ that involves working and making financial sacrifices.”

According to the survey, non-retired Americans are more likely than those who are currently retired to plan on making at least one financial sacrifice in retirement (92% vs. 72%).

In fact, non-retired Americans are more likely to say they will work full time longer than expected (45% non-retired vs. 11% retired); work a part time job (43% non-retired vs. 17% retired); move to a less expensive city or town (40% non-retired vs. 22% retired); and forgo medical care or treatment (28% non-retired vs. 14% retired).

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