Although the average expected retirement age is 64, the survey results show 76% of Americans feel it is more important to have a specific amount of money saved before retiring, regardless of age. This suggests that many accept they may need to work after their ideal retirement age in order to live comfortably in retirement.
The more important financial concern among respondents was the need to pay monthly bills, which came ahead of health care, education and/or retirement. Thirty-two percent of respondents between the ages of 60-75 say health care costs is their most important concern (second to paying monthly bills, 39%). By comparison, only 8% of respondents ages 25-29 cite health care as their top concern.
Most Americans are not financially ready for retirement, and lack the funding they feel is needed to support their own retirement. The survey found the average American has only 7% of their desired retirement nest egg saved. Three-in-10 (29%) of those in retirement or close to retirement (ages 60-75) have saved less than $25,000 for their retirement. Those who most likely have less than $25,000 saved for retirement are those who do not have access to a 401(k) (57%), those with less than $50,000 in annual household income (48%) and women (46%).
Overall, 57% of respondents feel confident about being able to retire comfortably. However, four in 10 (42%) are not confident at all. Confidence levels among the 40-59 age group where the lowest, while the highest confidence levels on a comfortable retirement were seen among individuals ages 25-39. Although the majority of respondents feel confident about being able to retire comfortably, many are afraid that even if they do all the right things now, it will not be enough for tomorrow (42%) or they will have under saved and it will be too late to recover (19%). Just over a third (37%) have no fear of retirement.
Further evidence towards a lack of confidence in retirement can be seen by the fact that only three-in-10 (30%) respondents have a detailed written plan for their finances in retirement. Only 38% have estimated the amount of monthly income they will need in retirement to maintain their desired lifestyle. Thirty-six percent agree they plan to enjoy life now and are not worried about the future and retirement planning. This sentiment is strongest among individuals ages 60-75 (57%). Thirty-nine percent of those ages 40-59 also plan to enjoy life now and are not worried about retirement planning.
The majority (53%) of Americans are not willing to take a reduction in Social Security and Medicare benefits during retirement in order to help reduce the nation’s debt burden. However, 43% would be willing to accept a reduction. The results found the primary factors that influence a willingness to take a personal reduction are age and annual household income. Those who are more willing to accept the reduction are younger (ages 25-49) and have an annual household income that exceeds $100,000. Additionally, Americans living in the south are more willing to accept a reduction than any other region at 49%.
Sixty-eight percent of Americans are not confident that the stock market is a good way to invest for their retirement. Confidence in the stock market as a place for investment is highest among respondents with an annual household income of $100,000 or greater.
Despite low confidence levels in the stock market, when respondents were asked what they'd do if they were given $5,000 to put away for retirement, half would still invest in the stock market instead of purchasing bank CDs (45%). Fifty-nine percent of Americans ages 30-39 responded they would invest the lump sum in the stock market, more than any other age group. Similarly, 38% of individuals with incomes less than $50,000 would do the same.
The Retirement Survey was conducted by Harris Interactive, Inc. on behalf of Wells Fargo. The survey included 1,500 telephone interviews of middle-class Americas in ages 20 to 79 on August 9-September 23, 2011.