"Despite the immediacy of the pandemic and its challenges, it is remarkable that workers are maintaining a focus on their future retirement," says Transamerica's Catherine Collinson. (Credit: Khongtham/Shutterstock.com)
Only one in four U.S. workers is very confident about being able to fully retire with a comfortable lifestyle.
"Demographic influences can profoundly affect a worker's ability to save, plan and prepare for a financially secure retirement," said Catherine Collinson, CEO and president of the Transamerica Center for Retirement Studies. "A greater understanding of these influences can help identify opportunities, envision solutions and inform public policy priorities for strengthening our retirement system."
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According to a new study by the institute:
- 34% of workers with a household income of $100,000-plus are very confident about their future retirement, compared with 14% of those with an income of $50,000 to $99,999 and just 11% with an income of less than $50,000.
- Urban workers (32%) are more likely than suburban (19%) and rural workers (16%) to be very confident.
- Full-time workers (25%) are more likely than part-time workers (15%) to be very confident.
Nevertheless, many Americans have a positive attitude and are working toward their retirement goals:
- More than four in five workers are saving for retirement through their current employer's 401(k) or similar plan and/or outside of work.
- 34% have taken a loan, early withdrawal and/or hardship withdrawal from a 401(k) or similar plan or IRA, including 25% who have taken a loan and 25% who have taken an early and/or hardship withdrawal.
- Workers have saved a median of $93,000 in all household retirement accounts.
- Almost half indicate that debt interferes with their ability to save for retirement.
- One-third of workers have a written financial strategy for retirement.
"Despite the immediacy of the pandemic and its challenges, it is remarkable that workers are maintaining a focus on their future retirement," Collinson said. "Nevertheless, many are still at risk of not achieving long-term financial security."
The public sector can help by addressing Social Security's funding shortfalls; expanding retirement plan coverage among all workers, including part-time workers; promoting and expanding the Saver's Credit, a tax credit for eligible taxpayers who save for retirement in a 401(k), 403(b) or similar plan or IRA; and supporting caregivers through Social Security credits, tax credits and paid family leave, she said.
"Strengthening our retirement system is best accomplished through collaborative efforts among policymakers, industry, academics, nonprofits, employers and individuals," Collinson said. "Every stakeholder plays an important role. By increasing our understanding of demographic influences, we can more effectively address inequalities and implement solutions that serve all."
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
