A recent report by the Federal Reserve Board raises several warnings about retirement savings habits, finding that 39 percent of those not retired have given little or no thought to financial planning for retirement and 31 percent have no retirement savings or entitlement to annuity benefits.
“As might be expected, the amount of thought given to retirement planning varies considerably by age,” it said. “The proportion of those ages 18 to 29 who say they have given no thought at all to retirement planning was the highest of any age group, at 31 percent. Those closer to retirement age are more likely to indicate that they have given thought to retirement planning. That said, slightly less than half of non-retired respondents ages 45 and above say they have given “a fair amount” or “a lot” of thought to retirement planning.”
Of those who are saving for retirement, half are not confident or only slightly confident in their “ability to make the right investment decisions when investing the money in these accounts,” it said. A quarter of those who are making investments in a tax-favored employer-sponsored plan do not even know what portion of their salary they invest and four-tenths do not know the maximum of their salary their employer will match.
Among non-retirees, only 22 percent anticipate that they will experience the traditional notion of retirement, which is working full time until a retirement date and then no longer working at all. For 26 percent, their “retirement plan” is to keep working as long as possible, and for another 12 percent do not plan to retire at all.
The figures were based on survey responses by nearly 9,000 people.