Retirement crisis? Workers not saving enough

NEED TO KNOW
  • Survey shows confidence in retirement savings is low
  • Many workers are guessing how much they'll need to retire
Retirement saving

As we learned during the economic downturn of the past several years, being able to retire when you want and with enough money to live comfortably is far from a sure thing. And a new survey shows Americans' expectations for retirement remain low.

According to the Employee Benefit Research Institute, 28% of workers have no confidence they'll be able to afford a comfortable retirement. That's the highest level in the survey's 23-year history.

It's hardly surprising when you dig into the numbers. Fifty-seven percent of those surveyed report having less than $25,000 in savings and investments (not counting the value of their homes and any defined benefit pension plans.) Just 66% of workers say they or their spouse are saving for retirement, down from 75% in 2009. A mere 2% of workers say retirement saving and planning are their most pressing financial issues.

And then there's debt. More than half of workers, as well as 39% of people already retired, say they owe too much. And that's hampering their ability to deal with short-term financial emergencies, much less long-term goals like retirement savings.

“Only about half of workers and a comparable number of retirees say they could definitely come up with $2,000 if an unexpected need arose within the next month,” said Matt Greenwald of Greenwald & Associates, which conducted the survey.

Perhaps most troubling is that many workers are flying blind when it comes to retirement. Only 23% say they've sought advice from a financial advisor, and 45% admit guessing how much they'll need to save for retirement, instead of seeking advice from a pro or using an online calculator.

Getting the numbers right is critical; with life expectancy increasing, so is the likelihood that people will outlive their money. Although day-to-day expenses can get in the way of long-term savings goals (41% in the survey cited cost of living as a reason they weren't contributing, or contributing more, to their retirement plan) it's important to fund that nest egg.

HLN money expert Clark Howard says you should put at least 10% of your income toward retirement. If that's too ambitious, then set aside what you can, even if it's only 1%. Bump it up another 1% every six months. If you're in an employer-sponsored plan, contribute at least enough to get the match if one is offered -- it's free money.

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