|Retirement Panic Attack?|
Americans are in a state of near panic about their retirement prospects. This is according to NIRS' national public opinion poll that finds 84% of Americans are concerned that economic conditions are impacting their ability to achieve a secure retirement.
Americans also believe that that the nation's retirement infrastructure is broken, and that stock market volatility makes it impossible to predict retirement savings.
NIRS research also reveals that Americans have rock bottom expectations when it comes to retirement. They just hope to survive in old age. More specifically, some 34% of Americans told us that they see retirement as simply surviving or living comfortably (34%), paying their bills (17%), and maintaining their pre-retirement lifestyle (11%). Only 11% expect retirement to include leisure, travel, restaurants, and/or hobbies.
The NIRS report, “Pensions and Retirement Security 2011: A Roadmap for Policymakers” is a clear indicator that the American people need and want relief from their retirement anxiety. What's more, this anxiety isn't unfounded. The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed to maintain its standard of living in retirement. Additionally, pensions continue to disappear in the private sector while Social Security benefits are decreasing amid talks of more cuts via raising the retirement age.
Interestingly, the study also finds that Americans really seem to understand that the shift away from defined benefit pensions for private sector workers is a big part of their retirement woes. What's more, an overwhelming majority of Americans understand that pensions would relieve their retirement anxiety. Nearly 6 in 10 Americans without pensions said a pension would make them more confident about their chances for a secure retirement. In fact, Americans told us they are looking for a jobs with a safe and secure pension to improve their retirement prospects. Nearly 30% of Americans are seeking a job with a pension or did so before they retired.
Although Americans want relief, they don't see empathy or action from Washington policymakers. Americans told us that Washington is disconnected from their retirement anxiety. Nearly 80% of Americans believe leaders in Washington do not understand how hard it is to prepare for retirement in this economy. Further, some 83% say government should take action to make it easier for employers to offer pensions. And, 81% believe that Washington leaders need to give a much higher priority to ensuring more Americans can have a secure retirement.
We also learned that amid the anxiety, Americans indeed are taking a number of actions to improve their retirement prospects:
It's our hope that policymakers will closely review these research findings to help guide effective retirement policies. Those policies first and foremost should do no further harm to the lifetime pensions that still exist for middle class families. We also need action to strengthen individual savings and Social Security. The stakes couldn't be higher. Each day as 11,000 Baby Boomers turn 65, the Great Recession has severely damaged their home equity and left their retirement boats rudderless in the aftermath of the perfect financial storm.
Posted on May 2, 2011, by Diane Oakley, NIRS Executive Director