An overwhelming majority (86%) of Americans embrace the view that they are responsible for making sure they have adequate income in retirement — as opposed to the state or their employer — reflecting the highest ownership sentiment of all countries surveyed.
They also have a realistic idea of what level of income they are likely to require in retirement. In fact, pre-retirees’ expected income replacement ratio (65% of income) closely mirrors actual ratios cited by retirees (64% of income).
Owning retirement readiness extends beyond seeing oneself as responsible and having realistic retirement income expectations. Americans report the greatest level of investment awareness of the savers we surveyed. What’s more, American retirees appear to be sincerely satisfied with the control they exercise over their DC plans. Nearly 60% report that they are extremely happy with the options they chose in funding their retirement while 80% saw themselves as having significant choice in selecting how they would use their retirement savings. These insights suggest an important connection between awareness, choice, and satisfaction.
Despite Americans’ optimism and awareness surrounding retirement issues, many still experience savings shortfalls. Approximately 1 in 4 actively working respondents is concerned about not saving enough. Indeed, less than half of US workers surveyed reported saving 10% or more in a retirement plan. To mind the gap, 40% of respondents expect to extend working life while 60% plan to work part-time in retirement to stem the shortfall.
Bridging the distance between savings confidence and shortfall will be an ongoing effort, including communication streams and retirement solutions that span the savings journey. Three approaches for activating these strategies follow:
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Exp: July 31, 2020