The TIAA-CREF Lifetime Income Survey found that 65% of Americans are saving 10% or less of their income during their working years. Even worse, 21% are not saving at all for retirement. Despite the fact that most are saving less than 10%, the survey found that 37% plan to retire before age 65.
Furthermore, the survey revealed that respondents underestimated how much money they will need during retirement. About 33% of pre-retirees believe they will only need 25% to 50% of their pre-retirement income. Only about 21% of respondents who haven’t retired yet said they will need more than 75% of pre-retirement income to be comfortable in retirement.
“Americans have not completely adjusted to the fact that right now we are captains of our own retirement planning ship. Most of us no longer have defined benefits pension plans at work. And most of us would probably agree that Social Security won’t give us enough income when we retire. Financially literacy can help pre-retirees think through retirement planning and assist them with building savings,” says Dan Keady, certified financial planner and director of financial planning for TIAA-CREF.
Other survey findings:
- Half of the respondents who say they want to retire before age 65 are 18 to 34 years old.
- About 72% of respondents who participate in a retirement plan either do not have or are unclear whether their plan has a lifetime income option, such as annuity. Only 18 percent are invested in such an option.