Skip to main content

You are here

Advertisement

Retirement Security Concerns Don’t Translate to High Balances — Yet

Americans strongly believe in and support saving for retirement. But that doesn’t necessarily mean that they’re saving as much as they are projected to need in order to be financially ready for retirement. The findings of two recent studies illustrate this disconnect.

The National Institute on Retirement Security (NIRS) in “Retirement Security 2015: Roadmap for Policy Makers | Americans' Views of the Retirement Crisis” found that Americans are convinced that it’s important to save for retirement.

There’s a lot of concern. A strong majority — 86% — agree that there is a retirement crisis in the United States, and 74% are highly anxious about their retirement outlook.

Belief in saving runs deep:

  • Eighty-two percent said that a pension is worth having since it provides steady income.
  • They consider retirement benefits only slightly less important than a salary.
  • State efforts to improve financial security during retirement by establishing “secure choice” plans by which they can save through payroll deductions gain the nod of 71%.
  • Sixty-seven percent would accept lower pay raises in exchange for guaranteed retirement income.
But that doesn’t mean they accept all responsibility: 84% say the federal government should do more to help ensure their retirement security.

The findings of the Employee Benefit Research Institute (EBRI) in EBRI Issue Brief 410, “Retirement Savings Shortfalls: Evidence from EBRI’s Retirement Security Projection Model,” suggest that commitment to actually setting money aside may not exactly jibe with the expressions of support for it that the NIRS found.

EBRI’s study found that the aggregate retirement deficit — the gap between what workers will have saved for their retirement and what they will need — is approximately $4.13 trillion for all U.S. households whose heads are between the ages of 25 and 64. EBRI shows that the deficit is most sizable for those close to retirement age.

But there is good news in EBRI’s findings, as well; data that may lend credence to the NIRS’ finding that there is a strong belief in the importance of saving. EBRI found that younger workers — particularly those in Generation X who have many years left in which to save — have smaller deficits.