Most Americans no longer expect their retirement years to be filled with travel or leisure. Instead, workers think their post-work life will be filled with anxiety as they watch their life savings dwindle each year.
More than three-quarters of Americans feel that the average worker cannot save enough on their own in the current economy to guarantee a secure retirement, according to a new survey of 800 individuals age 25 or older by Mathew Greenwald and Associates commissioned by the National Institute on Retirement Security. Large majorities of Americans say that stock market volatility makes it impossible for them to predict how much they will have in their nest egg when they retire (73 percent) and that they won’t be able to make up financial losses before retirement (72 percent).
Much of this anxiety was provoked by the recession. Many of those surveyed say that current economic conditions are impacting their ability to achieve a secure retirement (84 percent) and that the economic downturn showed exactly how risky America’s retirement system can be (81 percent).
Instead of dreaming about the golf course or beach, most Americans now consider a secure retirement simply surviving (34 percent) and paying the bills (17 percent). Others think a comfortable retirement involves maintaining their pre-retirement lifestyle (11 percent) and being able to pay for health care and insurance costs (8 percent). Only 11 percent of those surveyed are primarily preparing for a life of leisure that includes travel, restaurants, and hobbies, the survey found.
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Many workers understand that the risks of saving and investing for a secure retirement have been shifted from employers to individuals and are trying to prepare for retirement on their own. Americans have plans to cut spending in retirement (68 percent), increase savings (52 percent), and to pay off credit card (52 percent) and mortgage debt (47 percent). Over a third of those surveyed are planning to delay their retirement or have done so already (36 percent). In search of more security, more than a quarter (28 percent) of the survey respondents plan to seek a job with a traditional pension before they retire.
Many survey respondents say they long for a traditional pension that promises a stream of guaranteed payments in retirement. They indicated that those fortunate enough to be offered a traditional pension are more likely to have a secure retirement (84 percent) than those with only a 401(k). And over half (58 percent) of those without traditional pensions say a pension would make them more confident about their chances of having a secure retirement. More than three quarters of those surveyed say the disappearance of pensions has made it harder for workers to achieve the American dream (77 percent).
Many workers also expressed concern that their one source of guaranteed retirement income, Social Security, would be cut. Some 68 percent of those polled are opposed to cutting benefits for current retirees, and 59 percent are also opposed to cutting payments to future retirees. When asked about other options that would help make their retirement years more financially secure, three quarters of those surveyed said that employers not offering a retirement plan should automatically enroll employees into an Individual Retirement Account, with employees having the choice to opt out.