A new survey has reinforced the idea that many Americans aspire to be strong savers for retirement, but an even larger number fail to put that plan in writing. In addition, even those who save regularly continue to be worried about their ability to retire comfortably in the future.
According to the 2015 Aegon Retirement Readiness Survey, conducted in collaboration with the Transamerica Center for Retirement Studies, 52% of American workers define themselves as “habitual savers,” beating the global average of 39%. But even among the slight majority of U.S. respondents who save regularly, just 36% of them say they are “very/extremely confident” about their ability to retire comfortably.
Global Retirement Readiness
The United States outpaced respondents from other Western countries in the Aegon Retirement Readiness Index (ARRI), which was designed to measure relative levels of retirement readiness across nations with wildly different costs of living. However, the United States’ 6.5 rating (out of 10) tied China and trailed Brazil (6.7) and India (7.0).
No country came close to a high-index score, measured at 8.0 or above, and the report’s authors said Americans still face a number of retirement savings hurdles — especially for women, who scored an entire point lower in the ARRI measurement than did men.
Few Have a Plan in Writing
Both American men and women say overwhelmingly that they feel responsible for their retirement, but only 45% of women (and 62% of men) have a retirement plan they consider to be “developed.” Even more starkly, 21% report having a written plan. A recent survey by Transamerica reported even lower numbers than that, with 14% reporting that they have a plan written down. Those who do have a written plan, reports the survey, feel more confident about their prospects for retirement overall, across income levels.
Habitual Savers
Though have a written plan to save is important, it’s not as important as earnings, of course. The study found that Americans who call themselves “habitual savers” tend to make more, are older, and more of them are male and work full-time. The habitual savers earn, on average, over $63,000 per year, and 75% work full-time, compared to just 59% of “aspiring savers.”
Those aspiring savers make up 11% of the American respondents and are defined as those who wish they could save for retirement, but simply lack either the income, the access to a plan, or both. Overall, the study found that just 37% of those who earn less than $50,000 per year save for retirement, compared with 64% of those who earn more than that amount.
Recommendations
The study makes a number of suggestions for how employers, workers, and policymakers in the U.S. can improve retirement outlooks for Americans across income levels. The report encourages employees to work with financial advisors to create firm savings goals, and says that employers should play a major role in helping steer their employees towards sound advice. Some other recommendations include:
While the report data-centric, its authors say the broad findings are in line with common knowledge about saving. “Saving regularly and starting early,” they write, “are the surest means to becoming more financially secure in retirement.”
