Many Americans are worried about old-age financial security, according to a new report from Northwestern Mutual. Specifically, 78 percent of surveyed U.S. adults said that they are “extremely” or “somewhat” concerned about affording a comfortable retirement, and two-thirds said that they believe outliving their savings is a real possibility. Both of those figures are increases from earlier surveys and not too surprising since nearly a third of respondents said that they have less than $5,000 set aside for retirement, including 21 percent that reported having no savings whatsoever.
Adding to Americans’ old-age financial concerns is the long-term availability of Social Security benefits, which only 24 percent of surveyed individuals felt is “extremely likely” to still be around when they retire. Seventy-one percent of respondents also said that they plan to keep working at least until the age of 65, including 38 percent that expect to wait until age 70 and 16 percent that do not plan on retiring until after their 75th birthday. Although working longer means they will maximize the benefit they receive from the government, a majority (55 percent) of surveyed adults said that they anticipate their postponement of retirement will be because of necessity rather than choice.
Moreover, the top-cited reasons for why working past the traditional retirement age will be unavoidable were a lack of savings, doubts about Social Security as an adequate income source, and the rising cost of healthcare. What is worse is that even though so many respondents said they are worried about outliving their savings, nearly half reported that they have not taken any steps to address the potential problem. Among the pre-retirees that have attempted to prepare for the possibility of outliving their savings, the most popular actions included increasing their savings, putting together a financial plan, investing, and seeking professional financial advice.
Sources: Northwestern MutualPost author: Charles Couch