Few Americans Focus on Retirement

The majority of Americans do not appear to have done much retirement planning, according to the Financial Industry Regulatory Authority (FINRA) report “Financial Capability in the United States 2016.” 

Despite the study’s finding of overall improvement in Americans’ ability to make ends meet, the percentages of those who have planned for retirement or have a retirement account have changed little since 2009. That year, 37% had tried to figure out their retirement savings needs, compared with 39% in 2015. Fifty-seven percent of Americans had employer-sponsored or individual retirement accounts (IRAs) in 2009, while 58% had them in 2015. 

Unsurprisingly, respondents with lower income levels are much less likely to be prepared for retirement than those with higher incomes. Only 19% of those bringing in less than $25,000 have tried to plan for retirement, compared with 60% of those bringing in $75,000 or more.

 Similarly, the likelihood of having a retirement account increases dramatically with income, such that only a small minority of respondents in the $25,000 or less category have a retirement account (18%), while a strong majority of respondents in the $75,000 or more group have one (87%). Respondents who feel they are working toward long-term financial goals are much more likely than those who do not to have calculated retirement savings needs (53% vs. 17%) and to have a retirement account (67% vs. 42%). Among respondents who plan for more than 10 years, over half (57%) have tried to calculate their retirement needs, and nearly three-quarters (73%) have a retirement account.

2006 FLASHBACK

Poor Planning … Little thought bent toward retirement