Data & ResearchSeptember 3, 2015

Half of American Workers Lack a Plan for Retirement

And 40% say they feel they are ill prepared for retirement because of inadequate savings.

Reported by Lee Barney

Fifty-five percent of American workers do not have a plan for their retirement, LifeCare and the Financial Planning Association (FPA) found in a survey.

Sixty-seven percent of those not saving for retirement say they do not have the resources to do so after taking care of their everyday expenses, such as housing, transportation, food, household items, credit repayment and eldercare, and 24% do not have any idea of how to begin.

While American workers seem to feel confident about their short-term finances, their outlook on the long term is shaky. Sixty-two percent believe they have a good handle on housing costs, debt management (61%) and saving/spending (56%). When asked what they would speak to a certified financial planner about, 56% said to figure out how much they need to save for a comfortable retirement, 50% pointed to retirement preparedness and 40% noted how much to save in a 401(k) plan.

American workers are split in their opinions towards saving, with 25% saying saving and spending is a source of confidence and 26% saying it is a source of stress. Forty percent say they feel they are ill prepared for retirement because of inadequate savings.

While 60% of respondents are in the key savings ages of 45 to 64, 55% do not have a plan in place for retirement. Among the 45% who do have a plan in place for retirement, only 20% are working with a financial planner.

Nonetheless, 83% believe that working with a financial adviser would be beneficial, but misconceptions prevent them from doing so. The biggest one is that they cannot afford one (cited by 44%), followed by no idea of what a financial planner does (17%), thinking that they do not have enough assets (15%) and thinking their financial situation is not complex (13%).

Nearly half of those surveyed (48%) were automatically enrolled into their employer’s retirement plan. However, LifeCare and FPA said, American workers should not rely solely on their retirement plan. They should be saving additional money outside of the plan.

The report is based on a survey of 1,389 American workers conducted between June 15 and July 10. The full findings of the “2015 LifeCare/FPA Financial Confidence of American Workers Survey” can be downloaded here.