Notwithstanding a strong U.S. economy, only one in four Americans say they feel financially prepared for retirement, according to new research released Wednesday.
Certified Financial Planner Board of Standards reported that 79% of participants in a survey said they were not reassured that they had the best retirement savings strategies available to them. CFP Board said this may have to do with consumers not knowing what options exist.
Three in 10 respondents said they did not know whether their current employer offered a retirement savings plan. A quarter of respondents complained that saving for retirement was too complicated.
The poll was conducted in early April among a national sample of 2,200 adults.
“With so many Americans getting a late start on retirement savings, the odds are high that they will be unprepared to maintain the lifestyle they’re accustomed to living,” CFP Board’s chief executive Kevin Keller said in a statement.
“Americans know how important it is to save for retirement, but the truth is more than a third of those surveyed are overwhelmed by the process and, critically, many do not understand what products and resources are available to them.”
Even so, 60% of survey respondents who reported that they received retirement advice from a financial professional said they had “definitely” benefitted from this service. In addition, 54% believed they would benefit from receiving professional retirement savings advice if they should decide to use it in the future.
According to the survey findings, 49% of respondents thought adults should start saving for retirement in their 20s. Few follow their own advice, CFP Board noted.
It said 26% of Americans delay saving for retirement until their 30s, while another 15% wait until their 40s. Worse, 8% wait to start saving for retirement until after they turn 50.
“The nuances to retirement savings vary based on circumstantial factors, such as what you can afford to save and what savings programs are available to you,” Keller said. “This survey shows there is still a lack of clarity about what options are available to retirement savers, including ethical and competent financial advice.”
He said it was time for Congress, the administration and other stakeholders, including CFP Board, to jointly develop new solutions to meet the retirement crisis.
CFP Board said a report it had commissioned and was drafted by Fred Reish, an expert in retirement issues and partner at Drinker Biddle, will be released by year-end. The report will be informed by a Retirement Issues Working Group, a blue-ribbon panel of CFP professionals that provides on-the-ground, practical experiences with retirement security issues.