Average American Feels Alone in Retirement Planning

October 3, 2008 (PLANSPONSOR.com) - Average Americans feel they just cannot get ahead when it comes to saving for retirement and do not know quite where to turn for help, according to the results of a nationwide survey released by AARP Financial Inc.

An AARP Financial press release said over half (59%) of the average working Americans surveyed give themselves a grade of C or worse when it comes to financially preparing for retirement, and most believe the odds are 50% or less that they will be able to retire when they want to retire.

The survey indicated that average Americans feel that when it comes to retirement, they are on their own. Sixty-seven percent say they are not sure where to go for help. Seventy-two percent agree that no one is looking out for the average person.

Less than half (45%) of those surveyed are currently working with a professional financial adviser, and among those who are not, 49% believe financial advisers are not interested in them because they do not have enough money.

The survey revealed that when it comes to retirement planning, Americans can do more to become more financially secure:

  • 69% have not used an online retirement calculator;
  • 56% have not sought out retirement related information online;
  • Only 22% have a formal written plan for retirement;
  • 55% of those surveyed have not set their 401(k) contribution to the maximum allowed; and
  • 78% of those eligible have not made a catch-up contribution to a retirement plan.

In addition, due to current economic conditions, nearly one in five of those surveyed said they stopped or reduced putting money into a 401(k), IRA or other retirement account, and 20% pushed back or postponed their planned retirement date.

The AARP Financial survey results indicate the average American can use more education and more discipline when planning for retirement:

  • Less than a third (32%) of those surveyed say they know enough about how to determine when they can afford to retire and only one in five say they know enough about how to generate income in retirement.
  • Better than two out of five respondents (43%) said they spent more time planning their most recent vacation than they have spent planning for retirement. Twenty-eight percent said they have spent more time watching reality TV in the last month than they have spent planning and preparing for retirement over the last 10 years.
  • Nearly two-thirds of those surveyed (64%) said they have not estimated future healthcare costs in preparation for retirement and less than a quarter of respondents (22%) say that they know enough to be able to plan for long term care or major health expenses. Almost half of those surveyed said they have never had a serious discussion with their spouse about how they will deal with healthcare in retirement.

The survey of 750 adults age 40 or older in pre-retired households was conducted by telephone from August 1 to August 21, 2008, by Mathew Greenwald & Associates. Survey respondents had an annual household income between $35,000 and $100,000 -- which describes approximately half of all U.S. households -- and had between $10,000 and $150,000 in savings and investments.