In a report released last week by the National Institute on Retirement Security (NIRI), fewer Americans are concerned that they will not have enough money to live on in their retirement. While 86% of Americans agree that the country is in the midst of a retirement crisis, a number that increases to 92% for millennials, more people are taking control of their retirement savings and feeling better about their living expenses once they stop working.
Results of the Report
Every two years, NIRI polls thousands of Americans to see how they feel about their financial security for retirement. They also poll people about their views on government policies and legislation that could help those reaching retirement age. Compared to the results in 2013, the overall percentage of people concerned about their retirement outlook fell from 85% down to 74%. In addition, more people polled expect the money in their pension plans to be there when they retire at 84%, up from 79% in 2013.
The report also showed that Americans view the best option for retirement security to be defined benefit pension plans, even though the option is quickly disappearing from the employment scene. A total of 78% of people polled believe that a loss of pensions makes it harder to be financially secure in retirement, and more than half of those polled now strongly agreed that “those with pensions are more likely to have a secure retirement than those who do not.”
Retirement Saving Concerns
One of the biggest worries of those polled for the NIRI report was healthcare costs in retirement. In total, 86% of Baby Boomers cited the rising costs of long-term care as a major factor in making preparation for retirement harder. Coming in second place were salaries not keeping up with wages, with 80% of those polled citing it as a cause of concern. Fewer pensions and longevity were also concerns for the Baby Boomer generation; however, the millennials polled did not cite longevity as a concern.
Policymaking and Retirement Savings
Americans polled also did not see legislators or policymakers helping anytime soon. According to 87% of people polled, the nation’s leadership does not understand how difficult it is to prepare for retirement. A significant number of people also feel that policymakers need to do more to help Americans achieve secure retirement savings. However, the report also showed that people are open to alternative ideas. For example, state-sponsored low-risk automatic enrollment retirement plans for those without retirement plans at work was judged a good idea by 71% of those polled, and 75% said that they would consider joining such a plan if it was offered.
One interesting note from the survey comes from the questions on Social Security. When asked, only 42% of respondents replied that it was a good idea to delay taking Social Security, even if it meant tapping savings, in order to get greater benefits from the program. Many people do not seem to understand the massive difference in cash flow that delaying Social Security retirement benefits can make during retirement.