A Third of Americans Don’t Know Retirement Income Needs

October 11, 2011 (PLANSPONSOR.com) - According to a new survey released by financial services firm Edward Jones, 34% of Americans said they don’t even know what percentage of their savings they will need to take out annually in retirement.

More women than men were uncertain about their retirement spending, as 38% said they didn’t know how much they would need, compared with 30% of men.  

Conducted by Opinion Research Corporation, the survey of 1,011 respondents showed that 22% of Americans think they will need to use more than 10% of their retirement savings each year. Age influenced this expectation as 33% of those between the ages of 35 to 44 expect to spend the same percentage on a yearly basis once they stop working. A smaller number of retired Americans (15%) believe they will need to withdraw more than 10% of their savings compared with 25% of those who are currently not retired.  

According to a press release, in contrast to the older generations, younger Americans (18-34-years-old) say they do not believe their retirement will come at a high cost, as 19% said they plan to withdraw one to two percent annually from their retirement savings.  

Other key findings from the survey included: 

  • Forty-four percent of Americans expect to spend less than 10% of their retirement savings each year. This decision was influenced by gender as 50% of men polled indicated the same compared with 37% of women. 
  • Regionally, respondents differed on their retirement spending outlook. Twelve percent and 11% of Americans in the Northeast and West, respectively, expect to spend more than 20% of their retirement savings on a yearly basis. In contrast, a higher percentage of respondents in the South (49%) and Midwest (46%) expect to withdraw less than 10% of their retirement savings each year. 
  • Household income significantly influenced retirement spending expectations as 50% of Americans with a household income of more than $100,000 plan to spend less than 10% of their retirement savings each year. Comparatively one-third of those with a household income of $35,000 to $50,000 expect to spend more than 10% annually.