Most workers over age 40 don’t have sufficient retirement savings and aren’t setting aside enough to catch up, according to a survey from the Insured Retirement Institute.
Despite the nest egg shortfall, many still expect to retire early and believe they will have ample retirement income.
More than half of older Americans have less than $50,000 for retirement. But the majority aren’t increasing savings to boost their nest eggs.
Nearly six in 10 workers save less than 10% of their income and a third set aside less than 5%, the survey revealed.
Moreover, many have unrealistic plans, with 46% planning to leave the workforce at age 65 or earlier, and workers’ expectations for future income don’t align with current savings.
More than one-half of workers think they will need more than $55,000 per year, and one-third expects to need in excess of $75,000, survey responses show.
“It’s something we see fairly consistently whenever we research the retirement readiness of American workers,” said Frank O’Connor, vice-president of research and outreach at the Insured Retirement Institute.
While the survey doesn’t examine the reasons for the workers’ attitudes, seeing their parents’ stable retirement — which may include pension income — may be skewing their views, O’Connor said.