If a Wells Fargo & Co. survey is any indication, there’s no way to sugarcoat it: The retirement years look bleak for a large swath of the U.S. population. Take the fact that, according to the survey, more than one-third of respondents might find themselves living close to poverty in their golden years. Those 34 percent expect their retirement income to be half of their current income.
And based on the U.S. Census Bureau median household income, that equates to $25,000 – which, for a family of four, is close to the poverty line.
“We’ve got to marshal our resources as a country, an industry and as individuals to deal with the issues creating this cliff,” Joe Ready, director of Wells Fargo Institutional Retirement and Trust, said in a press release.
For the survey, Wells Fargo commissioned Harris Interactive Inc., a custom market research firm, to conduct 1,000 telephone interviews of middle-class Americans in their 20s, 30s, 40s, 50s, 60s and between ages 70 and 75. The calls were made between July 9 and Sept. 12, and they surveyed attitudes and behaviors around planning, saving and investing for retirement.
Among the survey’s highlights, 30 percent of respondents said they expect they’ll need to “work until at least 80” to be able to live comfortably in retirement. But 73 percent said their employer wouldn’t want them to work at that age.
Meanwhile, underscoring the severity of the recession and how it’s left in its wake the financial version of a Darwinian struggle to survive, almost half of the survey’s respondents who don’t have a written retirement plan say they’re too focused on the now, on things like paying bills.
The number of people who said they’d be willing to accept a reduction in entitlement programs like Social Security or Medicare to help fix the country’s debt problems has fallen to 37 percent from 43 percent in 2011.
There’s also a gender divergence. Forty-four percent of men said they’d accept that reduction because of the country’s debt, while 26 percent of women would agree to Social Security or Medicare reductions.
“We feel it is very important to keep shining the light on this issue,” Ready said. “People say they’ll work longer, but how possible will this be for millions of Americans?”
People don’t trust the stock market when it comes to their retirement funds, according to the survey. If given $5,000 to invest for retirement, 40 percent would put the money in a certificate of deposit or a savings account. Twenty-four percent would invest in stocks, and 22 percent would invest in commodities like gold or precious metals.
The distrust of stocks becomes more pronounced as the survey’s respondents get younger. It found that 37 percent of respondents in their 30s would invest in the market, while only 18 percent of respondents between 25 and 29 would do so. Political affiliation also matters in the survey answers.
Take attitudes toward 401(k) retirement plans. Most respondents said employers should give workers advice to help them manage their retirement savings. Of those who support giving the advice, more of them identify as Democrats than Republicans.
Sixty percent of respondents said retirement plans should automatically increase contribution rates by 1 percent each year. Again, more of the people in that 60 percent identified themselves as Democrats instead of Republicans.