Retirement woes mount for middle-income Americans

2007

A comfortable retirement could becoming a luxury only wealthy Americans will be able to afford, as a growing number of middle income earners believe it is impossible to meet today's bills and save for retirement at the same time.

Nearly half of America's middle-income earners – the backbone of the working nation – simply do not believe it is possible to bring up a family, pay the bills, live a little and save for retirement all at the same time.

A study of 3,000 people by Country Insurance & Financial Services has found just over a third of middle-income families – 37 per cent – felt they were able to save enough to live comfortably in retirement.

Nearly half felt they were unable to square the circle and 17 per cent were unsure, with women more pessimistic than men.

Nearly seven out of 10 women were pessimistic or unsure about the retirement prospects of middle-income families, compared with just five out of 10 men, the research found.

Many American middle-income earners are well intentioned about putting money aside for their retirement, and recognise the need to do so – but simply are unable to find the spare cash or the discipline to do at an early enough age.

Three-quarters agreed people should start saving for retirement before age 30, yet 62 per cent admitted they had waited until after age 30 or had not even yet started saving for retirement.

The two main reasons for this were a lack of enough money to save and invest (34 per cent) and the need to pay off debts (17 per cent).

"The good news is that Americans recognise the need to begin saving for retirement at a young age," said Keith Brannan, director of the financial security office at COUNTRY.

"But it's troubling that people aren't putting their advice into practice. Saving for retirement involves disciplined and consistent saving over time. It is quite achievable if people have a thought-out plan in place," he advised.

  Categories: