Most Americans Not on Track with Retirement Planning

Only one-third of respondents to a survey by Bank of America are on track with their retirement planning efforts, and nearly one-quarter (23%) report they have not started planning at all.

According to a press release about the survey of approximately 1,000 people across the country, nearly one-third (30%) of Americans say that starting retirement planning is difficult, while 29% say the same about starting a fitness routine and 28% say the same about starting a diet. Only one-third of survey respondents report they are on.

Respondents identified difficulty with respect to determining the types of investments they should make (42%), how much they will need to retire comfortably (40%), when to retire (33%), and where to begin (32%), the release said. Among affluent Americans surveyed, 34% reported difficulty with identifying appropriate retirement investments and 24% say they struggle with knowing how much they will need to retire comfortably.

The survey also found that despite Americans’ general familiarity with retirement products, many are not taking full advantage of them. Most Americans (79%) reported being familiar with 401(k) plans, but of those with access, 22% do not participate. Additionally, 68% of Americans report being familiar with IRAs; however, only 40% report having one. Less than half of Americans with IRAs (43%) fund them each year.

Among affluent Americans, 84% report they are familiar with traditional IRAs, and 62% say they are familiar with Roth IRAs; however, only 56% currently incorporate an IRA in their retirement planning. While affluent Americans are more likely to have an IRA than the general population, they are no more likely to fund it annually.

The survey was conducted by Braun Research via telephone between the dates of March 7-13, 2008, with 750 nationally representative Americans and 250 individuals with investable assets between $100,000 and $3 million.