Are you worried about retirement? If so, that may be a good
thing.
Those concerned they may not have enough money to retire
comfortably have plenty of company today. A
recent survey
by the Pew Research Center found that 38 percent of Americans are
not confident that they will be able to afford retirement.
Why could that level of worry be a good thing? Because savings
rates in the U.S. have been deficient for a very long time, an
increased level of worry might indicate a heightened awareness of
the problem. That awareness could be the first step toward
addressing the obstacles that future retirees face.
The sad state of retirement confidence
Certainly, the trends indicated by the survey show there is
plenty of cause for concern. Here are some major points:
-
Retirement confidence has taken a hit.
The 38 percent who are not confident about being able to afford
retirement is an increase from the 25 percent who responded that
way in 2009. While the economy has ostensibly been in a recovery
over those three years, many Americans continue to struggle, and
perhaps they've just had more time to assess the damage that the
financial crisis and the Great Recession did to their
wealth.
-
Asset declines are shocking.
The Pew Research Center found that the median wealth of American
households declined by 28 percent between 2001 and 2010. The
damage was worst for people between ages 35 and 44: Median wealth
in that age group declined by 56 percent.
-
People in their late 30s are most worried.
The severity of losses in that 35 to 44 age group may help
explain why retirement worries are most prevalent among people of
that age. The Pew Research Center found that 49 percent of those
between 35 and 44 are not confident about being able to afford
retirement, which is the highest level of doubt for any age
group. What suggests there has been a growth in awareness of the
problem is that just three years ago, this group was one of the
most unconcerned about retirement funding, with just 20 percent
expressing a lack of confidence at that time.
-
Average incomes make retirement challenging.
According to the Bureau of Labor Statistics, the average wage in
the U.S. is $45,230. The Pew study found that in the $30,000 to
$49,999 income bracket, lack of confidence in retirement funding
jumps from the overall average of 38 percent up to 70 percent. In
other words, Americans of average means are finding it extremely
difficult to
save enough for retirement
.
-
Too many people seem to be giving up.
The stock market has been shaky over the past dozen years.
Savings account interest rates are down near zero. In short,
Americans aren't getting much return on their investments, but
the other problem is that people seem to be abandoning their
investment programs. The Pew study found that the proportion of
households owning stocks fell by 6 percent between 2001 and 2010,
and ownership of retirement accounts declined by 2 percent over
the same time period.
While it's not enough just to
worry about retirement
, if it's the first step toward making a plan and improving savings
rates, a little anxiety might prove to be constructive. Ultimately,
you will likely find that the more action you take to secure your
retirement, the less you'll have to worry.