Survey Shows Americans Believe Retirement Savings Crisis Is Real
BOSTON (AP) _ Most Americans believe the country faces a crisis because baby boomers haven’t saved enough for retirement, but balk when it comes to calculating their own retirement needs, according to a new survey.
The study released today also said money experts were discouraging savers by throwing huge dollar figures at them when pitching retirement plans.
``People think, `This problem is so big that I’m not going to be able to do anything about it. So I’m not going to do anything about it,‴ said William Shiebler, an executive at Boston-based Putnam Investments Inc., which paid for the study.
``You don’t necessarily need a million dollar net worth to be able to retire,″ said Shiebler, who heads Putnam’s mutual funds unit. ``Some of those numbers are crazy in the first place.″
The random survey of 1,000 adults was the latest in a series of studies by money management companies into Americans’ savings habits and attitudes. It comes as the number of people covered by employer pension plans declines and as lawmakers, spurred by an aging population, contemplate major cutbacks to Social Security.
It was conducted by Michaels Opinion Research Inc. of New York and had a margin of error of plus or minus 3 percent.
According to the survey, 53 percent of those questioned say money experts’ predictions of a retirement savings crisis for baby boomers are very accurate. Thirty percent said the experts were exaggerating the crisis. Nine percent said they were wrong.
Nearly three-quarters said the country as a whole will suffer if the baby boomers, who begin turning 50 years old this year, are unable to support themselves.
The effects of such a crisis would include more elderly in the work force, more parents living with their children, lower Social Security benefits and even higher suicide rates, according to most of those surveyed.
At the same time, 64 percent of people questioned said they aren’t worried about having enough money to live on when they retire.
Psychologists say that attitude reflects something called ``temporal myopia,″ according to Ginger Applegarth, an author and financial manager who heads Applegarth Advisory Group Inc. in Boston.
``We can’t envision our own future,″ Applegarth said.
She said she was surprised that only 10 percent of the surveyed were very worried about their own retirement.
``That is shockingly low. And they don’t want to figure out how much they need, because they know the news is bad,″ she said. ``Baby boomers said, `Our parents didn’t do much planning and they got by. So why should we worry about it?″
The survey was aimed partly at helping money managers, like Putnam, figure out how to convince wage-earners to invest their cash.
For financial planners, Shiebler said, the message is: Go slow. He said the survey showed many people are confused and overwhelmed. They want some kind of enforced savings plan, and they’d like their employers to provide it.
Working-age people still look to employers to provide information about retirement planning: 74 percent, according to the survey. But they know their employers are less likely to resolve their retirement situation.
``The fact of the matter is, the classic form of retirement in the old days _ when you got a pension and social security was adequate _ that just doesn’t exist any more,″ said Joseph Nocera, an author and journalist who took part in a focus group that helped the study’s authors focus their questions.
``That is a huge change in American life,″ he said.