Majority of Americans Concerned About Insufficient Retirement Income
Recent surveys reveal a growing concern among Americans regarding their retirement income. Many workers express anxiety about insufficient savings and the adequacy of Social Security benefits.
Key Findings on Americans’ Retirement Concerns
- 44% plan to claim Social Security benefits before age 67.
- Only 10% intend to wait until age 70 to maximize their benefits.
- 37% want to access funds as soon as possible.
- 36% fear that Social Security funds may run out.
- 34% need income sooner.
Deb Boyden, head of U.S. defined contribution for Schroders, emphasized the importance of Social Security payments. She noted that many Americans are anxious to tap into these benefits due to reports of potential solvency issues. However, delaying benefits can significantly affect retirement finances.
Financial Needs for a Comfortable Retirement
Survey participants indicated they need an average of $5,032 per month to retire comfortably. Their expected income sources include:
- Cash savings: 60%
- Workplace retirement plans (401(k)s): 45%
- Investment income: 34%
- Spouse’s retirement plans: 30%
Workplace Retirement Participation
Among those in workplace retirement plans:
- 39% have a retirement income solution in their plan.
- 27% do not have one.
- 34% are uncertain.
Interest in employer-provided income products is significant, with 90% expressing interest in investment products that manage downside risk while aiming for returns above cash rates.
Retirement Preparedness
When asked about their ability to replace at least 75% of their last paycheck in retirement:
- 11% responded “definitely.”
- 39% said “probably.”
- 50% indicated “probably not” or “definitely not.”
Among retired individuals, 62% reported uncertainty about how long their savings will last. Additionally, 58% wished they had planned better for retirement. A troubling 74% of retirees earn less than 75% of their final paycheck, with nearly half relying on less than 50% of their prior income.
Strategies for Generating Retirement Income
Only about half of retirees have a defined income strategy. The common methods include:
- Systematic withdrawals from retirement accounts: 25%
- Certificates of deposit: 21%
- Dividend-paying stocks or mutual funds: 21%
Boyden remarked on the need for better management of retirement savings. Many individuals face challenging choices when beginning to withdraw funds. The defined contribution industry must innovate to simplify the retirement income process for Americans.
