A growing share of middle class Americans – those with investable assets of less than $100,000 -anticipates working until at least 80 to be able to afford a comfortable retirement, according to the annual Wells Fargo Retirement Survey released today.
Thirty percent of the participants in this year’s study say they would need to work into their 80s to have enough money for retirement, up from 25 percent last year, but octogenarian employment might not be the best retirement planning, according to the survey. Nearly three-fourths of the participants feel their employer would not want them to continue to work this long.
“People say they’ll work longer, but how possible will this be for millions of Americans?” Joe Ready, director of Wells Fargo Institutional Retirement and Trust, said in a statement. “Preparing for retirement can’t be kicked down the road because the other picture that is emerging is how many people will live very close to the poverty line in retirement.”
An impoverished retirement ranks as the greatest financial fear of middle class Americans, according to a monthly poll conducted by Millionaire Corner in May. More than 40 percent of investors with investable assets below $100,000 identified running out of money in retirement as their greatest financial fear. What is the second greatest financial fear of the middle class? Twenty percent of investors participating in our May survey cited “having to work longer than I planned to be able to comfortably retire.”
What’s the biggest regret of middle class Americans? Our research shows that “not saving enough for retirement” ranks as their biggest financial regret, by far. More than 32 percent of investors with less than $100,000 regret their lack of retirement savings. The second biggest regret, cited by 16 percent of middle class Americans, is having too much credit card debt. It’s interesting to note that middle class investors feel their best financial decision was buying a home (32 percent) and rank “making consistent investments in a retirement plan” as second (24 percent).
Low levels of financial literacy and a lack of retirement planning contributes to the financial insecurity of middle class retirees, according to the Wells Fargo survey. Three-fourths of the survey participants indicated that their retirement planning is based more on guesses than calculations and only 36 percent has a written retirement plan. Formal retirement planning can help investors stay on track to reach their financial goals.