Fed survey finds many households not adequately prepared for retirement

Results from a Federal Reserve Board survey suggest that many households are not adequately prepared for retirement.

In its new Report on the Economic Well-Being of U.S. Households, the Federal Reserve Board provides a snapshot of the self-perceived financial and economic well-being of U.S. households and the issues they face, based on responses to the Board’s 2013 Survey of Household Economics and Decisionmaking. The report provides insight into numerous topics of current relevance to household finances, including retirement and health expenses.

According to the survey, 31% of non-retired respondents reported having no retirement savings or pension, including 19% of those ages 55 to 64. Additionally, almost half of adults were not actively thinking about financial planning for retirement, with 24% saying they had given only a little thought to financial planning for their retirement and another 25% saying they had done no planning at all. Of those who have given at least some thought to retirement planning and plan to retire at some point, 25% didn’t know how they will pay their expenses in retirement.

Retirement delayed

The Great Recession pushed back the planned date of retirement for two-fifths of those ages 45 and over who had not yet retired, and 15% of those who had retired since 2008 reported that they retired earlier than planned due to the recession. Among those ages 55 to 64 who had not yet retired, only 18% plan to follow the traditional retirement model of working full time until a set date and then stop working altogether, while 24% expected to keep working as long as possible, 18% expected to retire and then work a part-time job, and 9% expected to retire and then become self-employed.

Source: Federal Reserve Board news release, August 7, 2014.

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