Friday, October 24, 1997

Survey shows 69 percent of workers saving for retirement

By MARY DEIBEL

Scripps Howard News Service

Buoyed by a sound economy and soaring stock market, Americans are socking away savings as never before in hopes of realizing their dream of early retirement, according to a new survey.

But that same poll found that most workers haven't figured out how much of a retirement nest egg they'll need and that many haven't banked even $10,000 as a down payment on financial security in their retirement years.

"The good news is the number of people saving for retirement has been steadily increasing -- from 61 percent in 1994 to 69 percent this year -- and that's an improvement over the 55 percent of current retirees who tried to save," said Dallas Salisbury, president of the Employee Benefit Research Institute, which commissioned the annual poll.

"The bad news is our survey found an alarming lack of planning," he continued. "Workers as well as retirees are dismally unprepared."

Key findings in the 1997 survey of 1,001 adults were that:

n Some 66 percent of current workers want to retire before age 65, and 33 percent by 55. But only 36 percent of current workers have tried to determine how much money they will have to save to retire comfortably, and only 25 percent have tried calculating the amount of money they'll need upon retiring.

The figure is even worse among current retirees: Only 20 percent bothered figuring out their income needs before retiring.

n Thirty percent of current retirees don't have the income to keep up their working years' lifestyle, and 36 percent fear they won't have enough money to live out retirement in comfort.

Apparently aware of the squeeze on their retired parents, most current workers, regardless of age, say they'd rather pay higher Social Security payroll taxes than see retirees' benefits cut.

n Workers age 33 and under who make up Generation X are getting a jump on retirement saving: While 25 percent report no retirement savings to date, another 20 percent have saved $50,000 or more.

Among baby boomers, 11 percent of those age 45 to 52 have no savings, as do 15 percent of workers between ages 34 and 44. However, 49 percent of older boomers have saved at least $50,000, as have 22 percent of younger boomers.

Among respondents age 53 and older, 11 percent have no retirement savings, but 49 percent have more than $50,000 in their retirement nest egg.

n The younger the worker, the more likely he or she is to count on personal savings providing most retirement income.

Fifty percent of current retirees say Social Security is their most important income source; 47 percent of workers 53 and older are counting on Social Security and their employer pension plans for the bulk of their retirement needs, but 61 percent of Generation Xers expect to rely on personal savings for retirement while 36 percent don't expect to bank on Social Security at all.

Mathew Greenwald, a market researcher who conducted the EBRI Retirement Confidence Survey, said his findings reflect today's confidence in the economy and the stock market but "the stock market and economic conditions will change."

"The message of this year's survey is that waiting until you're 50 to start planning retirement is a major mistake," Greenwald said.

The survey of 772 workers and 229 retirees was conducted by telephone in July and has margins of error of plus or minus 4 percent for workers and 6 percent for retirees. The annual survey, conducted since 1990, is funded by mutual fund and insurance companies and the American Association of Retired Persons.