Retirement
AARP Among Underwriters for 14th Annual Retirement Confidence Survey
News Release
April 5, 2004
Many workers, retirees not saving despite economic upturn
Despite the economic and stock market comeback of the past few years, many workers acknowledge that they are not saving, leaving them with the possibility of a bleak retirement.
The 14th annual Retirement Confidence Survey (RCS), conducted in January, found that only six in 10 workers and/or their spouses (58 percent) of all ages are currently saving for retirement, and only seven in 10 (68 percent) have saved in the past. These figures do not include Social Security or employer-provided pensions or retirement savings plans. At a time when workers are being asked to shoulder more responsibility for their income security in old age, fully half of workers think government and/or the employer should bear more responsibility for retirement security.
In addition, the latest RCS shows that most workers say that the amount they have saved is low. The survey finds that 45 percent of all workers report total household assets, excluding the value of their home, of less than $25,000.
"The lack of readiness for retirement is overwhelming," said AARP Policy and Strategy Director John Rother. "Social Security - lifelong, guaranteed, and inflation-protected - obviously remains crucial for most older Americans in achieving a secure retirement."
Rother also noted that, while many have expected that inheritances would bridge financial gaps as they aged, a recent AARP survey showed that, as of 2001, more than five in six (85 percent) Boomers said that they did not expect to receive an inheritance in the future.
Further indicating that retirement security could be something of a bust for Boomers who are banking on an inheritance as their financial linchpin, the AARP report said that among those who did receive an inheritance as of 2001, the median value was only $47,909.
The RCS was released today by the Employee Benefit Research Institute (EBRI), American Savings Education Council (ASEC), Mathew Greenwald & Associates and AARP. AARP is an underwriter of the survey.
The survey gauges the views and attitudes of working-age and retired Americans toward retirement, their preparations for retirement, and related retirement issues. The survey interviewed 1,002 individuals (783 workers and 219 retirees) age 25 and older in January 2004.
Some of the other key findings of the survey include:
- The proportion of workers who say they are saving for retirement has changed little since 2001(ranging from 62 percent to 58 percent).
- Three in five workers and/or their spouses (57 percent) have not attempted to figure out how much money they will need to have saved by the time they retire so they can live comfortably.
- Most workers (66 percent) say that it is reasonably possible for them to save $20 per week (or $20 more than they are currently saving) for retirement. Even half of non-savers say they could do this. Yet, they give a variety of reasons why they have not cut back on spending to save more than they do now.
Rother observed that the survey found that almost half of the workers who have not saved are at least somewhat confident about having enough money in retirement. He warned that unless they begin saving soon and are extremely fortunate in their investments, these workers are in for a rude awakening when they retire.
AARP is a nonprofit, nonpartisan membership organization dedicated to making life better for people 50 and over. We provide information and resources; engage in legislative, regulatory and legal advocacy; assist members in serving their communities; and offer a wide range of unique benefits, special products, and services for our members. These include AARP The Magazine, published bimonthly; AARP Bulletin, our monthly newspaper; AARP Segunda Juventud, our quarterly publication for Hispanic members; NRTA Live and Learn for National Retired Teachers Association members; and our Web site, www.aarp.org. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.