Almost half of American workers surveyed in a new report believe it will take a miracle for them to retire securely.
The 2021 Global Retirement Index (GRI) by Natixis Investment Managers listed the United States as 17th in retiree well-being, a drop from its rank of No. 16 last year. American workers, the firm wrote, believe their retirement dreams are slipping away as a result of the economic impacts of the COVID-19 pandemic, including increasing government debt, rising inflation and low interest rates.
The survey of 750 investors found that, overall, 41% of respondents—including 46% of Millennials, 45% of members of Generation X and 30% of Baby Boomers—say they will need a miracle to retire securely.
Two-thirds of workers surveyed see long-term inflation as one of the biggest risks to their retirement security, while 64% worry that health care costs will consume their savings. Half of workers said they are concerned that low interest rates will make it harder to generate retirement income.
Even as the annual Social Security Trustees’ report has estimated that the Social Security trust funds will be depleted in 2034, 42% of workers surveyed said it would be difficult to make ends meet if their Social Security benefits are lower than expected. To offset the potential loss of payments, 59% said they would have to keep working for longer, while 36% believe they would never have enough money to retire. This included 51% of Millennials, 48% of Gen Xers and 20% of Boomers.
Overall, 34% of investors surveyed do not believe they will have the option to retire, including 40% of Millennials and 25% of Boomers. These findings represent a population of investors who have a median net worth of $450,000 and who have accumulated $350,000 in savings for retirement, far more than the median of $65,000 saved for retirement by the general U.S. population, according to the survey.
In its survey, Natixis also underscored a growing demand for advisory help. Six in 10 (63%) investors say they need professional help with selecting investments in their workplace retirement plan, which 36% of Boomers and at least one in five younger investors say they do not understand.
Younger investors, including 73% of Millennials and 65% of Gen Xers, were most likely to say they need professional financial advice, compared with 57% of Boomers. Sixty-seven percent of investors say they would be motivated to invest more for retirement if they had access to investments that are more closely aligned with their priorities and values.
The GRI examines 18 performance indicators of retiree welfare, categorized into four topics: material well-being, finances in retirement, health and quality of life. While the U.S. ranked 17th overall, it placed 11th for finances in retirement, 17th in health, 21st in quality of life and 26th in material well-being out of 44 countries.