A majority of American retirement plan participants have felt moderate to severe financial stress over the last six months, according to a report.
In addition, New York Life’s 2014 Financial Stress and Retirement Readiness Report finds that women feel less prepared overall than their male counterparts for retirement and report higher amounts of stress as a result.
Seventy-three percent of all members report feeling extreme or moderate financial stress over the last six months. In addition, 60% of survey respondents say they are behind or far behind schedule in saving for retirement. Women reported both higher levels of extreme stress and higher amounts of unpreparedness than men.
The issues triggering financial stress for those surveyed include keeping a job or searching for one, the ability to afford healthcare in retirement and the perception that Social Security and Medicare will not be available by the time respondents retire. In fact, two-thirds or more of respondents believe government programs will not be available when they need them.
Also, more than half of respondents say they’ve done a poor job of investing and saving for their children’s education, which are additional stressors.
Some further highlights of the survey include the following:
- 60% worry moderately or a great deal that they will experience financial difficulties;
- saving for a child’s education is the No. 1 source of worry among parents, closely followed by retirement and emergency savings;
- 50% had US$100,000 or less saved for retirement;
- on average, participants want to retire by age 62 but believe they won’t be able to until 68; and
- 90% have no written financial plan for retirement.
The survey also asked participants about ways financial stress can be alleviated, and many say that obtaining a financial plan, learning basic budgeting skills, consolidating and/or paying down their debt and setting aside enough money to cover basic needs in retirement would be helpful to feel better prepared for retirement.
Many would also feel more secure if employers automatically increased contributions to their retirement plans, and if products such as retirement savings projections and retirement budgeting tools were provided.
More than 1,500 plan members took part in the survey.
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