You know it’s coming eventually, but when retirement is on the horizon, many Americans discover they’re not monetarily ready to stop working.
That’s according to the results of a new survey published by MoneyRates.com. Uncertainty surrounding the future of Medicare and Social Security has only been added to by a large percentage of Americans, according to the personal finance website. Apparently, Americans haven’t done their part to ensure their financial security.
“Saving for retirement is tough enough without approaching it blindfolded,” Richard Barrington, MoneyRates' senior financial analyst and the study’s author, said in a press release. “The survey results suggest many people have no clue whether they can afford retirement. How can you hit a target when you don’t know what you’re aiming at?”
Research conducted in Survey: Are Your Spending Habits Retirement Ready? demonstrates the likelihood that millions of Americans will reach retirement without knowing a suitable retirement savings goal. Once they’re retired, they’ll also possibly feel uncertain about how much they can afford to spend each month.
To come up with the findings, MoneyRates designed the survey and selected global market research firm Op4G to administer it. Among the several survey questions asked of 1,000 Americans were those about their finances, which included plans for retirement. For the purposes of the survey, many results were separated into groups of 500 respondents each. One group included people ages 45 to 64 who are within 20 years of retirement. The other group included those who are 65 and older and had reached retirement age.
MoneyRates' survey showed that 71% of respondents within 20 years of retirement didn’t set up a forecast to learn how long their retirement savings will last compared to their life expectancy. The results didn’t fare much better among respondents who had reached retirement age; 62% of that group didn’t know how long their savings should last.
In the group within 20 years of retirement age, 71% haven’t researched how much it costs to move into an assisted living facility. For those who had reached retirement age, 64% didn’t research the costs. As for the amount of money respondents expect to retire with, 53% of those within 20 years of retirement age say they anticipate they’ll have less than $100,000 in savings. The survey showed 46.8% of respondents age 65 and older said they have less than $100,000 in savings.
To help plan for retirement, MoneyRates encourages people to project how much they’ll need to maintain their lifestyle in retirement. The finance website recommends using a certified financial planner or using a retirement calculator to map it out.
Despite where you are now, however, AJC contributor Wes Moss, a chief investment Strategist at Capital Investment Advisors, says it’s never too late to save for retirement.
“I’ve seen plenty of folks throughout my career who postponed saving for retirement (for various reasons) until they were in their 40s, 50s and even 60s. They were able to catch up, and so can you,” he said in a September op-ed.
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