2024 study shows that Americans are worried about retirement
Written by: Cole Achtzehn
How do Americans currently view retirement?
In a 2024 study published by the National Institute on Retirement Security, authors Dan Doonan and Kelly Kenneally write, “that working age Americans are increasingly worried about retirement, and they see a return to pensions as a way to restore the American Dream of retirement. Eighty-three percent of respondents say that all workers should have a pension so they can be independent and self-reliant in retirement, and more than three-fourths of Americans agree that those with pensions are more likely to have a secure retirement.”
This was one of many alarming takeaways from the survey that really shed some light on the outlook of retirement in the U.S. that have only been exacerbated in the following months with announcements regarding the lower than hoped for cost of living adjustments to Social Security payments. However, this study did not just reveal that people are losing faith in the prospects of retirement, but showed an overall concern for the financial outlook of aging in general.
Is there a retirement crisis?
Based on the opinions of those in this study the simple answer is yes. The interesting part is the level to which participants agree:
- 79% of the study participants believe there’s a retirement crisis, up from 67% in 2020.
- 55% are worried about financial security in retirement.
- 73% say recent inflation increased their retirement concerns.
Is there urgency surrounding the state of Social Security?
Respondents were particularly grim when it came to the question of Social Security. For a majority of Americans, Social Security is a large part of their retirement finances if not the entirety of them. As a result the responses showed a definite sense of urgency in addressing concerns regarding Social Security:
- 87% want Congress to act now on Social Security funding.
- 90% believe it’s a priority for the next president and Congress.
- 52% support expanding Social Security.
What does support for pensions look like?
With such concern for Social Security, it is no surprise that many participants were very supportive of pensions. In fact, it became apparent that most of the responses indicated interest in having a reliable form of retirement income aside from Social Security:
- 77% say losing pensions makes the American Dream harder.
- 83% think all workers should have pensions.
- 84% want the government to make offering pensions easier.
How do respondents feel about government's role in retirement?
It was notable that there is a sense of disconnect from policy makers when it come sot retirement. Respondents seem to typically believe that retirement should be more prominent in the overall political discussion and that policy prescriptions surrounding retirement are very much in the forefront of minds. With the 2024 election right around the corner, it will be interesting to see if results are impacted by this sentiment among voters:
- 87% feel Washington doesn’t understand retirement saving challenges.
- 86% want retirement to be a higher priority on the policy agenda.
What about long-term care?
The final key takeaway from the study is that many are also worried about what it is going to cost them to maintain a healthy and happy life when they are able to retire. This factor could be a driving factor in the decision to retire, especially if other factors are leading to fear over financial security over the term of retirement:
- 87% worry about rising long-term care costs.
- 80% are concerned about nursing care expenses.
- 75% fear rising housing costs in retirement.
- 66% are anxious about healthcare and daily costs of living rising.
What should we take away from this study?
It feels as though concerns about retirement are growing. People no longer trust the staples of building the foundation for retirement. People believe that more money will be needed and that it is harder to make that money last. Even worse, many people feel as though the political attention this bubbling crisis deserves is nowhere to be found. This all can paint a very negative picture where it can be very easy to lose hope. However, there is still room for hope.
while some traditional methods of building a secure retirement might be careening towards a disaster, there are still plenty of ways to take things back into your own hands and proactively build towards that retirement you deserve. Through personal financial planning you can find different ways to grow, protect and build long-term wealth that can lead to even brighter outcomes than many believe even in the current climate.
The best news is that you do not have to do it alone! Our team of advisors are ready to help create detailed and personalized financial plans that can put our clients on the right track to retirement success. All it takes is one meeting with an advisor:
Source:
Source: Research by Greenwald Research.
Source link: https://www.nirsonline.org/reports/retirementinsecurity2024/