If you’re not 100% confident in your retirement plan, you’re not alone. Most consumers would grade themselves as either average or below average when it comes to planning effectively for their financial futures, a new survey shows.
Investment company TD Ameritrade commissioned The Harris Poll to survey 2,000 adults between the ages of 40 and 79 who have at least $25,000 in investable assets. To get representation from consumers at different stages in their lives, researchers collected an equal number of responses from adults from four age groups: 40 to 49, 50 to 59, 60 to 69 and 70 to 79.
A majority of respondents — 60% — said they believe they have a well-defined strategy for retirement, but many don’t feel that great about the strategy’s results thus far. In fact, 58% would give themselves a grade of a C or lower on their current retirement savings. Those in their 40s and 50s were harshest with their grading, with 66% of respondents in each of those age groups giving themselves a grade of C or lower compared to 56% of those between 60-69 and 45% of those between 70-79.
For many, retirement savings lower than hoped
One reason some respondents may be giving themselves such mediocre grades is because they have not managed to save as much as they would have liked. The study found that less than half of respondents in their 40s and 50s have managed to save at least $100,000. In fact, only the following percentages from the age groups surveyed have saved at least $100,000 for retirement:
- 41% of those between 40-49
- 46% of those between 50-59
- 62% of those between 60-69
- 67% of those between 70-79
The average ideal retirement age is 67, but many respondents didn’t feel certain that they will reach their goal of retiring by then. Only 60% of respondents in the 40-49 age group believed they would be able to retire at their desired age. Meanwhile, 65% of those between 50-59 think they will be able to retire when they want to, compared to 78% of those between 60-69 and 82% of those between 70-79.
Some younger respondents may feel like they are behind the eight ball, as 46% of those in their 40s have taken early withdrawals from their retirement accounts, the survey found. Younger generations may also feel more pressure to better plan for retirement: they are more likely than their older counterparts to view Social Security as a financial cushion when they need it, as opposed to a lifeline that will them afloat.
Planning for retirement is a marathon, not a sprint. The sooner you can get started with making a plan, the better. Not only should you take some time to determine how much you might need for retirement, but you should have regular checkups to see if you are on track. If you feel like you are falling short, consider whether you should make plans to retire later or find ways to save more.