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Whether the U.S. is or isn't
facing a retirement crisis isn't a matter of debate for the majority
of Americans. A new poll shows that 86 percent of people agree that it's
a crisis. And it's hardly just those approaching retirement who see it
that way. When the generation just starting to plan for retirement—them
millennials—are singled out in the data, 92 percent agreed.
At the same time, the results from a report released Tuesday
by the National Institute on Retirement Security (NIRI) show fewer
Americans are worried they won't have enough money to be self-sufficient
in old age. Every two years, NIRI polls to see how Americans feel about
(oxymoron alert) financial security in retirement, as well as their
views on government policies that could make the retirement picture less
bleak. This year, overall results showed the percent of those concerned
about their retirement outlook falling to 74 percent, from 85 percent
in 2013. As well, more of those lucky people with pension plans now
expect the money to be there when they retire—84 percent, up from 79
percent in 2013.
While
defined benefit pensions are fast disappearing, the poll makes it very
clear that they're viewed as the holy grail of retirement security. The
loss of pensions makes it harder to achieve the American dream,
according to 78 percent of those surveyed. That belief seems to be
getting more intense: More than half of those polled now strongly agreed
that "those with pensions are more likely to have a secure retirement
than those who do not." Two out of three respondents also said they'd
willingly accept smaller pay increases in exchange for that secure
stream of income. For the youngest generation polled, the millennials,
that number rose to 72 percent.
Healthcare
costs loom large in retirement security worries. When asked what made
preparing for retirement harder, 86 percent of Baby Boomers cited
the rising cost of long-term care as a major factor. The next greatest
obstacle cited were salaries not keeping up with wages, at about 80
percent. Fewer pensions also play a big part, according to 74 percent of
Boomers, and 70 percent said greater longevity is a major factor. That
view didn't hold for the other major demographic age wave, the
millennials, who obviously haven't been poring over mortality tables
like their elders. Longevity was cited by 44 percent of the younger
generation as a major factor.
Americans
don't hold out much hope that policymakers will help. The nation's
political leadership doesn't understand how hard it is to prepare for
retirement, according to 87 percent of those polled. A slightly smaller
proportion felt that Washington needs to do more to help Americans
achieve secure retirements. But the people taking the survey were open
to other ideas, like state-sponsored low-risk automatic enrollment
retirement plans for those without retirement plans at work. That was
judged a good idea by 71 percent of respondents, and 75 percent
said they'd consider joining such a plan.
The
poll did reveal one area where some retirees-to-be could help improve
their financial security in old age. When asked whether they agreed that
it was a good idea to delay taking Social Security, even if it meant
tapping savings, in order to get greater benefits from the program, only
42 percent said yes. Waiting as long as possible to take Social
Security can make a huge difference in one's cash flow in retirement. And it doesn't require Washington to do a thing.
Culled from Bloomberg
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