That was the number one factor cited by 23% of respondents to a recent survey from the for Retirement Savings, trailing the top-noted reason, “other financial priorities,” by just 1%.
Finances clearly loom large, however. In addition to the 24% that cited other financial priorities, another 20% cited the lack of extra money for savings. Still, only about half (54%) of the survey respondents currently participate in their company’s retirement plan. The survey of 1,008 adults was conducted by Harris Interactive in early March.
Only 4% responded that “savings for retirement isn’t important right now,” though this number is significantly higher for younger respondents (17%), according to Transamerica. Only 1% said that the “complexity” of saving for retirement is the most important barrier toward saving more, a key factor behind retirement savings proposals put forth by President Bush in February (see ERSA Redux “Better,” But Doubts Linger ).
“Our findings echo a common theme we hear from participants: the misperception that individuals can’t afford to save for retirement,” says Catherine Collinson of the for Retirement Studies. “Yet, the reality is that Americans truly can’t afford not to save for retirement. The challenge is to move individuals past the acknowledgement of the importance of saving into actively planning and contributing to their retirement future.”
In view of the concerns frequently expressed about participant willingness and/or ability to manage their retirement plan investments, survey respondents were surprisingly keen on the notion of managing all or a portion of their social security savings. Nearly two-thirds (63%) of respondents asserted they would be very or somewhat comfortable managing their own Social Security savings and determining how all or a portion of it is invested.
However, as Collinson notes, “Previous surveys from the Center have found Americans, on the whole, have not taken a proactive role in educating themselves about retirement savings or managing their retirement investments (see Gen X Plan Participation Rates Wane , Participation Gap Emerges in Small Biz K Plans ).
“Taken together, these survey findings show that Americans understand the importance of saving for retirement,” Collinson continues. “Unfortunately, as long as Americans continue to feel the pinch of a tight job market, retirement savings may take a backseat to other financial priorities.”
The current and past surveys are available on the Center’s Web site at www.ta-retirement.com/thecenter