Less than one-quarter of working Americans between the ages of 60 and 67 who are nearing retirement believe they have enough money saved to support themselves after they stop working, according to a new survey conducted by investment management firm Schroders.
The survey included 2,000 investors from across the country, and what it shows is that retirement readiness is suffering from a crisis of confidence. Working Americans at or over the age of 45 believe it will take $1.1 million in savings to retire comfortably; however, the majority of respondents (59%) expect to have savings of less than $500,000.
Only 24% of respondents ages 60 to 67 said they had enough money saved, and 53% of older workers said they are concerned that financial stress will have negative impacts on their overall health.
The outlook was somewhat different for millennial respondents. Most millennials believe that the savings amount required for a comfortable retirement is slightly higher than the older respondents ($1.3 million vs. $1.1 million). However, only 29% of millennials said they believe they will reach $1 million in retirement savings.
Millennials are also more concerned than seniors (64% vs. 53%) about financial issues impacting their health and quality of life.
While recent legislation has increased access to retirement accounts, 39% of older workers and 56% of millennials said they wanted more guidance from their employers on how to invest their retirement plans in 2022.
“There are profound gaps between what American workers say they need for a comfortable retirement and what they expect to have,” said Deb Boyden, head of U.S. defined contribution at Schroeders. “This could be from a lack of planning, or for many it might just be too hard to save and invest enough to reach their retirement goals. The fact that, once again, so few Americans nearing retirement are confident they have enough money speaks volumes about the work we still need to do.”
Lack of retirement confidence among seniors has been a regular discussion among reverse mortgage professionals. It is one of the factors that led to establishing industry referral partnerships with financial planners, and to the industry’s push to position reverse mortgage products as part of a holistic retirement plan.
