Putting money aside for retirement is a necessary goal to living comfortably during consumers post-working years and covering their day-to-day costs. Research has shown that many Americans are likely to face shortfalls in their golden years for a number of reasons, ranging from inadequate savings to job losses or financial emergencies. However, a new survey shows that one of the most common reasons many people are not secure in their golden years is due to a lack of planning.
A study conducted by Capital One Sharebuilder found that while 54 percent of workers plan to retire by age 65, roughly 36 percent are not making contributions to a retirement plan, such as a 401(k) or IRA account. Another 26 percent expressed confusion over how much they should be putting away to meet their retirement needs.
Retirement sentiment appears to be in danger, as many Americans say they may have to work part-time during their golden years, while others say they may never have enough money saved to meet their retirement needs. For example, 23 percent of survey respondents said they plan to never retire, while 25 percent said they will maintain a part-time job during their retirement. The latter number increases as Americans age, with 40 percent of those 55 to 65 giving this response.
“Now more than ever, it is important for Americans to take their retirement plans into their own hands to ensure they have an adequate nest egg,” said Dan Greenshields, president of Capital One ShareBuilder. “While planning for a time that many see as a distant future can be a daunting task, people need to assess where they want and expect to be financially when they retire and take advantage of the various tools and resources available to plan for their financial future.”
Why aren't people saving money?
Some respondents outlined obstacles to putting money away for their golden years. Twenty percent said they were helping to pay for educational expenses of themselves or family members, while 10 percent cited a job loss as the reason. Fourteen percent cited growing daily expenses as their reason for failing to save. However, 37 percent said nothing has impeded their ability to save – they simply have not started planning.
Putting money away for the future is crucial to avoiding debt and strain during retirement, and those who have not started planning should consult a credit counselor to design a money management plan that takes their post-working needs into account.