Tack on yet another study pointing to doom and gloom for future retirees. According to data released by the Employee Benefit Research Institute, a vast majority of respondents to a recent survey are concerned that they won’t be able to afford to retire comfortably.
The headline is backed up by bullet points and data points galore, so definitely take a look, but I want to cut to a few highlights:
- More than half the respondents expressed some level of confidence in having enough money for a comfortable retirement — 13% are “very confident” and 38% are “somewhat confident.” Still, 21% are “not too confident,” and more than a quarter — 28% — are “not at all confident.”
- Asked how much they think they’ll need to be financially secure in retirement, a striking number of workers cite very large savings targets: 20% say they need to save between 20% and 29% of their income, and nearly one-quarter indicate they need to save 30% or more.
- Just 2% of workers and 4% of retirees identify saving or planning for retirement as the most pressing financial issue facing most Americans today. Both are most likely to identify job uncertainty (30% of workers and 27% of retirees) and making ends meet (12% each).
- 55% of workers and 39% of retirees report having a problem with their level of debt, and only half (50% of workers and 52% of retirees) say they could definitely come up with $2,000 if an unexpected need arose within the next month.
The institute surveyed 1,254 individuals (1,003 workers and 251 retirees) ages 25 and older to obtain what is termed a representative cross section of the U.S. population. I am no statistician, but I just can’t imagine 1,254 individuals is a perfectly representative population.
Nonetheless, the outcome echoes what we hear nearly everywhere else — not enough people are saving for retirement, with many of those simply unable to find a way to consistently do so. Savings and investment plans are a function of cash flow, and with people worried about their next paycheck or unexpected expense, the ability to save runs right into a wall.
Worse, there’s no quick fix to the broader problem — if you’re in the situation already, short of vastly improving your own financial situation, you’ll have to stick to the small things. Keep expenses low, focus on income investments, see what you can cut out of your everyday budget without it significantly affecting your life.
But perhaps most important, remember that millions of Americans are living comfortably in retirement, and not all of them got there by winning the lottery. A comfortable retirement, while a difficult achievement, isn’t impossible.
Hopefully, we’ll see more of those people the next time around.
Marc Bastow is an Assistant Editor at InvestorPlace.com.