U.S. Workers Still Lag In Retirement Savings, But Execs See Hope

Many Americans remain unprepared for retirement, but rays of sunshine are peeking through the dark clouds, according to several National Retirement Planning Coalition financial executives who spoke at a recent press conference in April, kicking off National Retirement Planning Week.

The optimism springs from the fact that 58% of baby boomers have some savings outside of retirement plans, and 52% of millennials are saving through a 401(k) plan, they said.

“These are lessons left over from the Great Recession, so there is some hope” that Americans of all ages know they have to save, said Cathy Weatherford, president and CEO of the Insured Retirement Institute. “Young people still have a lot of work to do [to be ready to retire], but they have four or five decades to get there.”

However, that does not negate the fact that Americans on a large scale are not prepared for retirement, according to an IRI study of 806 people between the ages of 55 and 71.  Baby boomers, the youngest of whom are just a decade or so away from retirement age, have failed to plan adequately or save enough, according to the IRI report.

Some 42% of baby boomers have no retirement savings, and of those who do have savings, 38% have less than $100,000. Only 38% have calculated the amount they will need to retire.

“There also has been a slight increase in the number of people carrying credit card debt and in late bill payments,” said Bruce McClary, a vice president at the National Foundation for Credit Counseling. “Less than 20% of people feel very confident they can retire securely, and 30% say they are not at all confident they can retire.”

He was referring to numbers in the foundation’s 2018 “Consumer Financial Literacy Survey,” which included more than 2,000 participants.

The executives noted that retirements are getting longer. Three-quarters of people who turn 65 will be alive at age 90 and nearly half will be alive at 95, said Tim Seifert, vice president and head of annuity sales at Lincoln Financial Group.

“Only one-third of Americans think they will be more secure in retirement than their parents were,” Seifert added. “They need to have a retirement strategy that will last 30 or 35 years.”