Gallup: Americans Still Don't Get Retirement Savings Realities

June 26, 2006 ( - When it comes to most Americans' expectations about their financial future after their working lives, the latest Gallup poll indicates that most still don't have a clue how it is going to work.

A news release bemoaned what Gallup called “a disconnect” between where working Americans think they get money and the actual experiences of those who have already retired.

Adults who have not retired are most likely to expect their 401(k), IRA, Keogh or other retirement savings account to be their major source of retirement income. But the vantage point is significantly different among retirees who said they rely on Social Security as a major source of income.

Gallup found that most respondents cited personal investment accounts such as a 401(k), IRA, Keogh or other retirement savings plans as expected income sources. In fact, nearly half of non-retired adults (47%) said they expect this to be a major source of income. Among non-retired adults, no other income source mentioned in the survey comes close to the percentage mentioning personal investment accounts, Gallup said.

About one in four adults who are still working said they expect the equity in their home (26%), a work-sponsored pension plan (26%) or Social Security (25%) to be major income sources in retirement. Less than 20% expect their regular savings accounts or CDs (19%), individual stocks or stock mutual funds (19%), or part-time income (18%) to be a major source of income.

Trailing the list are annuities or insurance plans, which 7% mentioned were a major income source, money from inheritance, also at 7%, and rent and royalties, at 6%.

According to Gallup, expected retirement income sources differ significantly by household income groups. Most high-income non-retirees (those making at least $75,000 per year) say a 401(k) or similar type of savings account will be a major source of retirement funds. For non-retired low-income earners (those in households making less than $30,000 per year), Social Security is most likely to be cited as a major source.

Other Income Sources

Non-retired adults in high-income households are significantly more likely than those in low-income households to cite a range of investments as major sources of retirement income, including: 401(k) or similar accounts (72% compared to 20%), stocks or mutual funds (32% versus 8%), home equity (33% versus 15%) and regular savings accounts or CDs (27% compared to 13%). Higher-income respondents are also much more likely to expect work-sponsored pension plans to be a major source of retirement income (36% versus 11%).

Results are based on national telephone interviews in which Gallup surveyed 1,005 adults, aged 18 and older, from April 10 to April 13, 2006. The poll asked non-retired adults whether they expected 10 different income sources to be their major source of income, a minor source of income or not a source of income during their retirement.