Most Americans Not Prepared for Retirement

026 - Nervous Man

The recession has not prompted many people to change their behavior and start saving more for retirement, according to a new survey by Charles Schwab.

The quarterly survey found that many Americans are neither financially nor emotionally ready for retirement, even as they approach their retirement years. Almost four in 10 Americans are not currently saving for retirement and, despite market losses, six in 10 Americans have not adjusted their thinking about what age they will retire.

Survey respondents estimate they will need just over $1.2 million to comfortably retire, yet those currently saving for retirement have put away an average of $194,000. Despite this awareness, 41 percent of Americans feel positively about their retirement preparedness and another 22 percent feel indifferent.

A deeper look at those closest to retirement (ages 55-63) shows a gap between planning and reality. Fifty-one percent of 55-63 year olds surveyed have saved less than $500,000, though they most commonly believe they will need $2,000,000 to retire comfortably. To help bridge the $1,500,000 gap, 52 percent of this group are thinking they will retire later than planned, while 47 percent report they have not changed their thinking about retirement.

Among respondents aged 18-34 years old, 35 percent feel “indifferent” when it comes to their retirement preparedness, with 11 percent citing “fear” and another 9 percent responding with “anxiety.” Almost three in four assert that, despite the economy, they haven’t changed their thinking about when they will retire. Additionally, nearly six in 10 of those 18-34 years old confess they are not currently saving for retirement. Among savers, an average of just $23,000 has been set aside for retirement purposes.

Photo by: TifanyDrawnPhoto

About the author

Lon Jefferies, CFP®, MBA
Lon Jefferies, CFP®, MBA

Lon Jefferies is an investment advisor representative with Net Worth Advisory Group, a fee-only financial planning firm in Salt Lake City, Utah. He is a Certified Financial Planner (CFP®) and a member of the National Association of Personal Financial Advisors (NAPFA). He possesses an MBA and bachelor's degrees in Finance and Marketing from the University of Utah. Lon writes articles for local magazines such as Utah CEO, Business Connect and Utah Business Magazine, and he consistently contributes articles to online magazines such as FIGuide.com and FILife.com (by The Wall Street Journal). Additionally, Lon is an expert author at EzineArticles.com. Lon has been quoted nationally in publications such as the NY Times and Investment News.

Lon can be contacted at (801) 566-0740 or lon@networthadvice.com. Learn more about Net Worth Advisory Group at http://networthadvice.com and visit Lon's blog at http://www.utahfinancialadvisor.blogspot.com.

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