The question of when to retire has become significantly less of a priority for a majority of Americans more concerned about pressing day-to-day financial obligations.
The question of when to retire has become significantly less of a priority for a majority of Americans more concerned about pressing day-to-day financial obligations, a new Wells Fargo study finds.
Almost six-in-ten (59 percent) of middle class respondents said that their top financial concern is “paying the monthly bills,” up from 52 percent last year. At 13 percent, saving for retirement is a distant second, as 42 percent said that saving and paying the bills is “not possible.”
As a result, the survey finds, nearly half (48 percent) of respondents express a lack of confidence that they will ever be able to save enough for a comfortable retirement, while more than one-third (34 percent) of the middle class said they will work until they are “at least 80” because they have not saved enough for their senior years, up from 25 percent in 2011 and 30 percent last year. Thirty-seven percent said, “I’ll never retire, but work until I’m took sick or die.”
The government shutdown and partisan gridlock have sapped consumer confidence in recent weeks. The Bloomberg Consumer Comfort Index declined in the period ended Oct. 20 from minus 34.1 to minus 36.1, an eight-month low, Bloomberg announced Thursday. Despite the last-minute agreement that averted the country’s first-ever default, more households were pessimistic about the economy than at any time in the past year. Another survey released this week found that only 29 percent of Americans believe current economic conditions are good, according to a CNN poll released this week.
The question of when to retire becomes clearer with a financial plan, the survey found. For those who have a written financial plan, 70 percent describe themselves as “confident” in their future retirement vs. less than half (44 percent) of those who do not have a plan.
Almost one-third (31 percent) of Americans in prime retirement saving years between 40 and 59 said they have a financial plan, versus 69 percent who do not. Both groups in this age range say they will need a median nest egg of $200,000 for their retirement. However, people who attest to having a written plan say they have saved a median of $63,000, or 32 percent of their goal, while those without have only saved a median of $20,000, or 10 percent of their goal.
Wealth level studies conducted by Spectrem’s Millionaire Corner find that Millionaire investors are more likely than Main Street investors to have received advice from their financial advisor about when to retire. Half of Millionaires have received this advice compared with 44 percent of those with a net worth between $100,000 and $1 million (not including primary residence). Among Main Street investors, those up to the age of 54 were most likely to say they will seek this advice in the future.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.