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Despite the economic
and stock market comeback of the past few
years, many workers acknowledge that they
are not saving, leaving them with the possibility
of a bleak retirement.
The 14th annual Retirement Confidence Survey
(RCS), conducted in January, found that only
six in 10 workers and/or their spouses (58
percent) of all ages are currently saving
for retirement, and only seven in 10 (68 percent)
have saved in the past. These figures do not
include Social Security or employer-provided
pensions or retirement savings plans. At a
time when workers are being asked to shoulder
more responsibility for their income security
in old age, fully half of workers think government
and/or the employer should bear more responsibility
for retirement security.
In addition, the latest RCS shows that most
workers say that the amount they have saved
is low. The survey finds that 45 percent of
all workers report total household assets,
excluding the value of their home, of less
than $25,000.
"The lack of readiness for retirement is overwhelming,"
said AARP Policy and Strategy Director John
Rother. "Social Security - lifelong, guaranteed,
and inflation-protected - obviously remains
crucial for older Americans in achieving a
secure retirement."
Rother also noted that, while many have expected
that inheritances would bridge financial gaps
as they aged, a recent AARP survey showed
that, as of 2001, more than five in six (85
percent) Boomers said that they did not expect
to receive an inheritance in the future.
Further indicating that retirement security
could be something of a bust for Boomers who
are banking on an inheritance as their financial
linchpin, the AARP report said that among
those who did receive an inheritance as of
2001, the median value was only $47,909.
The RCS was released today by the Employee
Benefit Research Institute (EBRI), American
Savings Education Council (ASEC), Mathew Greenwald
& Associates and AARP. AARP is an underwriter
of the survey.
The survey gauges the views and attitudes
of working-age and retired Americans toward
retirement, their preparations for retirement,
and related retirement issues. The survey
interviewed 1,002 individuals (783 workers
and 219 retirees) age 25 and older in January
2004.
Some of the other key findings of the survey
include:
- The proportion of workers
who say they are saving for retirement
has changed little since 2001(ranging
from 62 percent to 58 percent).
- Three in five workers
and/or their spouses (57 percent) have
not attempted to figure out how much money
they will need to have saved by the time
they retire so they can live comfortably.
- Most workers (66 percent)
say that it is reasonably possible for
them to save $20 per week (or $20 more
than they are currently saving) for retirement.
Even half of non-savers say they could
do this. Yet, they give a variety of reasons
why they have not cut back on spending
to save more than they do now.
Rother observed that
the survey found that almost half of the
workers who have not saved are at least
somewhat confident about having enough money
in retirement. He warned that unless they
begin saving soon and are extremely fortunate
in their investments, these workers are
in for a rude awakening when they retire.
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At Xerox
we had a saying when discussing our
individual career planning processes
- "Failing to plan was planning
to fail". The same and more can
be said for retirement. See "Retirement
Link" at this web site for some
more help with this topic RETIREMENT
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Also
in this issue:
Federal Pension Law (1)
Personal Finance Planning
(2)
Investment Feature of the
month (3)
Future Topics (4)
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