Americans tend to have an optimistic view of retirement-but a recent poll found many people still have a lot of work ahead of them before they can leave their jobs.
For instance, 47 percent of respondents said their retirement savings will last them 10 to 20 years. Those numbers seem promising until you consider that people should be actually planning for 30 years. Similarly, nearly half of all Generation X respondents said they expect to rely on pensions to help fund retirement. The plan may seem sound, but experts warn that many pension plans in the U.S. are at risk of going belly up. Plus, fewer than a third of all companies now offer pension plans.
The poll was sponsored by the American Institute of Certified Public Accountants (AICPA) in an effort to better understand the American public’s approach to savings and retirement. The group sponsors a Web site called 360 Degrees of Financial Literacy (www.360financialliteracy.org) to help people come to terms with financial issues at different life stages. Here’s a look at some additional polling results:
Paying For Retirement
Younger Americans do not plan to rely as heavily on Social Security for retirement as do older Americans. Close to six in 10 people age 55 and older plan to fund their retirement through Social Security. Only four in 10 (41 percent) of Americans under the age of 55 are counting on Social Security to fund their retirement. Instead of relying on Social Security, those under 55 are more likely to rely on their personal savings and investments.
About three in 10 Americans have a child who is planning on going to college in the next five to 10 years. One quarter of these parents plan to pay for their child’s education with personal savings, another quarter intend for their child to earn scholarships to pay for tuition. Surprisingly, only 13 percent of respondents plan to use private student loans and just 12 percent plan to fund their child’s education with financial aid.
Rising energy and home-heating costs and uninsured medical expenses rank as the highest financial concerns for Americans (15 percent each). Retirement and the price of gas (13 percent each) follow closely behind. Education costs are also a concern as 9 percent of respondents worried about their child’s college education and 7 percent worried about their own college education.
Forty-one percent of Americans under age 55 say they plan to rely heavily on Social Security for retirement.