But the good news is that 79% want their employers to offer more advice to help manage their retirement plans. People of all five generations surveyed voiced strong support for changes in 401(k) plan design and regulation to make it easier for employers to provide guidance and advice. Some 65% believe they should be saving more and could be if they got more guidance or advice.
Sixty-five percent said that those without access to a 401(k) or similar plan should have an equivalent system. Of those with a 401(k) and company matching contribution, 85% said they contributed as much as their company will match. Eighty-two percent said employees should be offered a lifetime income option in their retirement accounts.
A Wells Fargo news release about the study said 56% of the 50-somethings surveyed are “confident or very confident” they’ll have the money to support the retirement lifestyle they want. Unfortunately, according to Wells Fargo, their retirement account balances don’t back that up; while the median retirement savings of respondents age 50 to 59 is $29,000 and stretched out for a 20-year retirement, the savings would amount to about $190 a month (assuming a 5% rate of return). The survey found that only 33% have a detailed written retirement plan.
Thirty-seven percent don’t know how much they’ll need and/or can’t estimate how long they’ll be able to live on what they have saved. Almost two-thirds (62%) say they have not changed their retirement savings rates in the two years since the recession began and only 16% have increased it.
“Too many Americans have their heads in the sand in the face of obvious savings deficits,” said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust, in the news release. “People are not even close to where they need to be in total savings. Barring a miracle, a winning lottery ticket or a big inheritance, they’re going to be forced to dramatically cut back their lifestyles after retirement.”
Middle-class Americans, especially those under 50, increasingly know that retirement is a do-it-yourself endeavor. Only two in five (40%) of those surveyed said they think Social Security will be available throughout their retirement – including only 20% of 20-somethings and 22% of 30-somethings.
According to the Wells Fargo news release, compared with Americans who are married or partnered, single Americans:
- Are more likely to be “very confident” of having enough to retire on comfortably (25% among unmarrieds vs. 17% among marrieds).
- Are more likely to believe Social Security will be available to them during their entire retirement (47% vs. 37%).
- Expect to spend less on healthcare after retirement ($24,000 vs. $36,000).
- Are contributing more to their 401(k) or similar plans (9.7% of annual income for unmarrieds vs. 8.0% for marrieds).
- Are less likely to be contributing to an IRA (23% vs. 30%) or to say they can depend on their brokerage accounts as a source for retirement income (47% vs. 55%), but are more likely to have or expect a pension (55% vs. 41%).
The survey found significant differences between age groups, both in attitude and in degree of financial preparedness.
On behalf of Wells Fargo, Harris Interactive Inc. conducted 1,756 telephone interviews of middle income Americans in their 20s, 30s, 40s, 50s and 60s, surveying attitudes and behaviors around planning, saving and investing for retirement. The interviews were conducted between September 9, 2010 and October 7, 2010.