Eighty-six percent of the people polled by the National Institute of Retirement Security (NIRS) agreed that the U.S. is facing a retirement crisis, but the number of those concerned about having enough money to be self-sufficient in old age declined from 85% in 2013 to 74% in the recent poll. I guess you to have credit American self-confidence for that anomaly.
The poll, taken every two years, indicated that those with pension plans expect the money to be there when they retire (84%, up from 79% in 2013), but the loss off pensions makes it harder to achieve the American dream, according to 78% of those surveyed. Defined benefit pensions, viewed as the holy grail of retirement security, are fast disappearing and the inability of a number of states to fund (and, in some cases, to cut) their pension plans adds another level of insecurity for retirees.
More than half of those polled strongly agreed that "those with pensions are more likely to have a secure retirement than those who do not." Two out of three respondents also said they'd willingly accept smaller pay increases in exchange for that secure stream of income. For the youngest generation polled, the millennials, that number rose to 72%.
It's interesting to note that many of the multiemployer contracts negotiated by unions in the past did exactly that — chose to accept smaller pay increases in exchange for pension benefits — and those benefits are now under attack by a number of governors across the country.
Healthcare costs are a major source of retirement security worries cited by the NIRS poll. When asked what made preparing for retirement harder, 86% of Baby Boomers indicated the rising cost of long-term care. Fewer pensions also were cited by 74% of Boomers, while 70% said greater longevity is a major factor. Only 44% of the younger generation cited longevity as a major factor.
According to 87% of those polled, the nation's political leadership doesn't understand how hard it is to prepare for retirement, and a slightly smaller proportion felt Washington needs to do more to help Americans achieve a secure retirement. Some said they'd be open to state-sponsored low-risk automatic enrollment retirement plans for those without retirement plans at work.
The poll revealed one area where future retirees could help improve their financial security in old age. When asked if they thought it was a good idea to delay taking Social Security to get greater benefits from the program, even if it meant tapping savings, 42% said yes. Waiting as long as possible to take Social Security can make a huge difference in one's cash flow in retirement — and it doesn't require Washington to do a thing.
Beau Weisman, Editor