The Fed released their Report on Economic Well-being of US Households and found some startling retirement trends. In summary, Americans are woefully underprepared to retire or even survive for 3 months without their primary source of income.
“The survey results suggest that many households are not adequately prepared for retirement. Thirty-one percent of non-retired respondents reported having no retirement savings or pension, including 19 percent of those ages 55 to 64. Additionally, almost half of adults were not actively thinking about financial planning for retirement, with 24 percent saying they had given only a little thought to financial planning for their retirement and another 25 percent saying they had done no planning at all. Of those who have given at least some thought to retirement planning and plan to retire at some point, 25 percent didn’t know how they will pay their expenses in retirement.
The Great Recession pushed back the planned date of retirement for two-fifths of those ages 45 and over who had not yet retired, and 15 percent of those who had retired since 2008 reported that they retired earlier than planned due to the recession. Among those ages 55 to 64 who had not yet retired, only 18 percent plan to follow the traditional retirement model of working full time until a set date and then stop working altogether, while 24 percent expected to keep working as long as possible, 18 percent expected to retire and then work a part-time job, and 9 percent expected to retire and then become self-employed.”
On the brighter side, only one third of respondents said they consider themselves worse off than they were five years ago. But still, the lack of retirement planning and just savings in general is worrisome and speaks volumes about how fragile the economy really still is.
You can read the full report here.