In a new survey to better understand the retirement needs of Americans, Ipsos found that 60% of adults aged 25 and older were trying to meet basic financial needs and savings goals, while only one in five were actively building savings and investments. The report concludes from this, that corporate economic recovery has yet to trickle down to Main Street.
The ongoing emphasis on safety and security seems particularly evident considering that, despite exceptionally low yields, the financial product used by consumers more than any other was traditional savings (71%), with life insurance, the next closest, used by 50%.
A majority of respondents said they expect to retire between the ages of 62 and 70 and anticipate being in retirement for over 15 years (19.6 years on average). Eight out of ten said they believe that Social Security will not provide enough income to live in retirement.
38% of those surveyed feel unlikely they'd have enough money to cover basic monthly expenses in retirement and 50% feel unlikely they could maintain their standard of living. Americans may be overly optimistic about retirement given their stated estimates for basic monthly expenses in retirement, says the report. Among those surveyed, current retirees said they need $2,857 per month and those not yet retired said they'll need $3,987. The report figures that those not yet retired will need over $935,000 to cover basic monthly expenses over the course of their projected retirement.
Despite the disconnect between what Americans think they'll need in retirement, and what they actually have, a majority recognize the necessity for investments that provide a fixed monthly payout in retirement.
Those surveyed were asked about the potential for a fixed-rate annuity being added to the investment options available in 401(k)s. 73%)said they would like having this option available, and 83% of those ages 25-34 felt the same way. While 14% felt they had a very high level of knowledge about annuities in general, 60% felt this 401(k) annuity option would be good for retirement.
These findings are from an Ipsos poll conducted April 21 to May 4, 2010. This national sample of 1,082 adults aged 25 and older with an unweighted probability and a 100% response rate would have an estimated margin of error of +/- 3 percentage points 19 times out of 20 of what the results would have been had the entire adult population aged 18 and older in the United States had been polled.
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