Among Americans who say they'd like to retire, 32 percent say they're unsure if they can, according to a new Pentegra Retirement Services survey.
Another 19 percent of respondents report that they'll have the means to retire at age 65. Respondents ages 35 to 54 are 27 percent more likely to say they need more than $1 million to retire than respondents ages 18 to 24 (at 18 percent) while respondents ages 35 to 54 are 45 percent more likely to say they'll only need up to $500,000 to retire as opposed to 62 percent of respondents ages 18 to 34.
"Younger adults new in the job market are likely making a lower salary and basing their retirement thinking on where they are now in their life, but they need to realize that their cost of living and expenses later on will be significantly different," says Rich Rausser, senior vice president of client services at Pentegra.
Still, 92 percent of respondents say at least some of the average person's paycheck should go into a retirement account, and they say an average of 14 of a paycheck should be put toward retirement.
"This is much higher than Pentegra had predicted, and we're thrilled people have solid hopes and plans for their future,” Rausser says. “However, this number can scare people away with the thinking that they could never realistically put that much money away each paycheck – 14 percent is overwhelming for some people. The important lesson here is that it doesn't have to be all or nothing."
Of respondents with children under the age of 18, 21 percent report that they haven't yet planned for retirement. Meanwhile, 12 percent of respondents with no children say they haven't planned for retirement.
Parents helped 28 percent of respondents who've planned for retirement, and financial advisers help 33 percent of respondents who've planned for retirement. Another 28 percent of respondents who've planned for their retirement report they received no help, and 31 percent of respondents who' re already retired say they planned on their own.
Twenty-one percent of female respondents are more likely to be unsure about when they will retire than male respondents at 13 percent. Respondents ages 18 to 34 say they expect to retire at age 62 on average while respondents ages 35 to 54 say they believe they can retire at an average of age 65. For respondents over age 55, they say they should be able to retire at age 67 on average.
"For so many Americans planning for retirement seems too enormous to tackle, and it feels like it is already too late,” Rausser says. “But this is not so. Start with 1 percent, 2 percent, 3 percent of salary. Commit to a plan of auto-escalation, each year increasing to your retirement plan by 1 percent. With salary increases and the tax break associated with employee deferrals, it should be fairly painless. And the numbers will budge. It is never too late."
Putting away just $4 a week for 25 years increases a retirement savings by $16,608 while saving $30 a week can boost those savings by $124,469 during the same time frame.
"The more time your savings have to grow, the more you can take advantage of the effect of compounding,” Rausser says. “Compounding is what happens when you earn money not just on contributions to your account but also on the earnings themselves. It is interest on interest, and that means your account grows faster.”