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Data & Research February 25, 2009
Fewer Expect to Fully Retire
Fewer Americans expect to retire, but many remain confident in their own ability to plan for retirement.
Reported by Rebecca Moore
Fewer than one in three Americans expect they will ever be able to fully retire, according to a study commissioned by Scottrade. This represents a decline from 39% in 2008 to 32% this year, according to a Scottrade press release.
Scottrade’s research found that 43% of Americans indicated their retirement accounts decreased 10% or more since last year. The study also indicated that almost two-thirds of Americans do not plan to contribute to an IRA, up from just more than half last year.
In addition, concern over Social Security continues to weigh on the minds of Americans, as 77% of respondents said they are concerned for its future and more than half indicated they think it will run out by the time they reach retirement, the press release said.
Generational Differences
Despite their financial fears, 61% of respondents remain confident about their own ability to plan for retirement. The difference between those who do their own retirement planning versus those who use a professional financial adviser is far more pronounced for Gen Y than other generations (28% plan independently; 5% use an adviser).
Boomers (67%) and Gen Xers (64%) are the generations most concerned about having enough money for retirement, according to the survey. However, Gen Y respondents are actually slightly more confident this year that they will be able to save enough to fully retire.
Across all generations, the top strategy for addressing financial concerns is spending less. Gen X is taking the most action and leads the generations in using coupons (66%), cutting back on entertainment (65%), paying down debts (57%), and reducing credit card spending (55%). Boomers lead the pack in comparison shopping (70%), and Gen Yers lead when it comes to focus on increasing income, with 30% working more to earn more and 29% looking for a higher-paying job.
The 2009 American Retirement Study by Scottrade polled 1,000 Americans 18 years of age or older using Synovate’s national online omnibus survey, eNation, in late January.