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Retirement Planning > Spending in Retirement > Income Planning

Saving for the Future Is More Popular Than Netflix, but Many Are Still Falling Behind: Survey

by Ginger Szala

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What You Need to Know

  • Only about a quarter of Americans 45 and older have saved enough for retirement, a Schroders survey found.
  • Half of respondents said they didn't know how their assets were allocated.
  • Only 4% of retirees said they were living the dream, while 18% were struggling.

It’s good to know that Americans have their priorities straight. A recent Schroders survey on retirement asked 1,000 respondents ages 45 to 75 about the activities they’ve done more of during the pandemic. Thirty-nine percent of them said they focused more attention on saving for the future — comparable to the share, 38%, who said they spent more time watching Netflix.

But despite this increased focus, many are still falling behind.

In the survey released Thursday, Schroders Investment Management, a global manager with $785 billion in client assets, found that while a majority of respondents worked on health and fitness (53%) and spent time with family (52%), only 29% said they developed a financial plan and only 26% were focused on their portfolio.

And though 43% said their savings rate hadn’t changed during the pandemic, only 27% of non-retired respondents said they felt “very good” or “fully on track” with retirement planning.

The survey also found only 18% of non-retired respondents ages 60 to 67 said the same, which, the survey reasons, is why only 26% of non-retirees stated they had enough saved but 60% said they did not.

Further, 62% of working respondents planned to keep working for multiple reasons: to keep busy (57%), because they enjoy their work (56%) and to cover their living expenses (53%).

Cash-Heavy Allocations

The survey also reviewed how assets for retirement were allocated, comparing the age 45-59 age group to the non-retired 60-67 age group.

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Schroders found that both groups were cash-heavy (27% and 25% respectively), while equities was only 30% of the younger group’s mix, and 35% for the older group. Fixed income was 17% and 23% respectively, while target date funds were 15% for the younger and 9% for the older.

Almost half of respondents (49%) said they had no idea how their assets were allocated.

“Not knowing how your assets are allocated, or holding one-quarter or more of your retirement savings in cash, indicate there may be a need for a greater understanding of how a diversified portfolio could maximize growth while managing risk,” said Joel Schiffman, head of intermediary distribution for Schroders in North America, in a statement.

Biggest Concerns

The survey also asked all participants to pick the top five concerns about retirement. More than 80% of retired and non-retired respondents cited higher health care costs than expected. Health issues draining savings was another top worry.

Other concerns were a major market downturn that could reduce assets, not being able to afford the lifestyle they want and not knowing how best to generate income or draw down assets.

Retirement, for many respondents, isn’t all it’s cracked up to be. Only 4% of retired respondents said they “were living the dream,”  while 42% said they were comfortable, 36% were doing OK, and 18% said they were struggling. Also, 33% in retirement said their expenses were higher than expected.

The study was done Jan. 20-27 by 8 Acre Perspective.

Ginger Szala

@gingerszalaink