How Much to Save for Retirement
Please note it is your responsibility to evaluate the accuracy, completeness and usefulness of any information, opinion or advice contained in the content below.Press release by Harris Interactive, the 13th largest and one of the fastest-growing market research firms in the world. Let’s Agree to Agree: Men and Women Share Views on How Much to Save for Retirement, According to New WSJ.com/Harris Interactive Study.
Just 11% of Pre-Retirees Are Most Counting on an Employer-based Pension
ROCHESTER, N.Y. – October 30, 2007 – Retirement savings can be a source of contention between couples as they approach their golden years, but according to a new study conducted by Harris Interactive for The Wall Street Journal Online, men and women respond similarly when asked whether they and their partners are on the same page about saving for retirement. About half (49% of men and 47% of women, respectively) say they are in agreement with their spouse or partner about this issue.
Higher income couples are the most likely to be in agreement about retirement savings, while low-to-medium income couples are more likely to avoid the elephant in the room. Couples with higher household income ($75,000 or above) are more likely than those with lower income to be in agreement about retirement savings (67% vs. 30% of income less than $35K, 28% income of $35K - $49.9K and 30% income of $50K - $74.9K).
These are just some of the results of an online survey of 2,321 U.S. adults ages 18 and over conducted by Harris Interactive® between September 4 and 6, 2007 for The Wall Street Journal Online.
Take the Time to Talk
While those that talk to their spouses and partners about retirement savings are likely to be on the same page about retirement savings, altogether almost one-quarter (24%) of pre-retired adults say they have never discussed how much they need to save for retirement with their spouse/partner. Perhaps unsurprisingly, older adults are more likely than their younger counterparts to have broached the topic of retirement savings with their spouses or partners, with thirty-one percent of those ages 18 to 34 citing that they have never discussed this, compared with only 13 percent of those ages 55 and over.
Funding Retirement from a Variety of Sources
As the realities of financing retirement are changing, so are the expectations of how this stage of life will be financed. Retired adults say they rely most on social security (39%) and employer-based pensions (26%) to fund their retirement. By contrast, only 20 percent of pre-retired adults expect to rely primarily on social security to fund their retirement, and just 11 percent are most counting on an employer-based pension
Expectations on retirement funding are changing, with those under 35 expecting to take matters into their own hands. Younger adults are likely to expect to fund their retirements with their own savings and investments and tend not to expect social security to pay their way through retirement. Younger adults (age 18-34) are more likely than older adults to plan on relying primarily on their own savings and investments to fund their retirement (44% vs. 28% for 35-44, 28% for 45-54 and 32% for 55+). Younger adults (age 18-34) are also not counting on social security to fund their retirement, with only 1-in-10 expecting this to be their most important source of retirement income (12% vs. 24% for 35-44, 23% for 45-54 and 31% for 55+)
Retirement Spending: Is It Enough?
Those who are already retired are more likely to feel comfortable living on less than their pre-retired cohorts believe that they will, with half (49%) of retired adults living comfortably on less than $50,000 per year, and only 29 percent of pre-retired adults thinking that would be enough. Despite the discrepancy in the actual amount thought necessary to live comfortably, retired couples are similar to non-retired couples in that about half (55%) are in agreement about how much to spend in retirement.
According to Richard Millard, President of the Financial Services Industry Research Group at Harris Interactive, “Pre-retirees have higher expectations for income requirements in retirement. This may be because of rising expectations around retirement planning, or because they aren’t able to accurately anticipate their needs and expenses. Given the talk about the instability of social security in the future, it is important for pre-retired adults to begin to plan accordingly for their retirement needs sooner rather than later.”
Nearly half of retired adults (47%) find that their living expenses are about what they have expected. However, retirees living in the Northeast are much more likely than those living in other US regions to have found that their expenses are much or slightly higher than they had expected (45% vs. 32% for Midwest, 27% for South and 26% for West).
TABLE 1
MARITAL STATUS
"What is your marital status?"
Base: All adults
|
Total |
|
|
% |
|
|
Married |
50 |
|
Single, never married |
26 |
|
Divorced |
12 |
|
Separated |
2 |
|
Widowed |
4 |
|
Living with partner |
5 |
Note: Percentages may not add up to 100% due to rounding.
TABLE 2
RETIRED OR NOT RETIRED
"Which of the following best describes you?"
Base: All adults
|
Total |
Married/Living With Partner |
|
|
% |
% |
|
|
I am retired from my primary occupation. |
27 |
30 |
|
I am not retired. |
73 |
70 |
TABLE 3
RETIRED SPOUSE OR PARTNER
"Which of the following best describes your spouse or
partner?"
Base: Married/Living With Partner
|
|
Total |
|
% |
|
|
He/She is retired from his/her primary occupation. |
25 |
|
He/She is not retired. |
75 |
TABLE 4A
VIEWS ON SAVING FOR RETIREMENT—BY AGE
"Thinking about how you and your spouse or partner view
retirement and how much you would need to save, which of the following best
describes you?"
Base: Married/Living With Partner And Not Retired
|
Total |
18-34 |
35-44 |
45-54 |
55+ |
|
|
% |
% |
% |
% |
% |
|
|
I want to save more for retirement than my spouse/partner thinks is |
11 |
13 |
7 |
9 |
17 |
|
We are in agreement about how much we need to save for retirement. |
48 |
44 |
47 |
52 |
51 |
|
My spouse/partner wants to save more for retirement than I think is |
3 |
2 |
3 |
4 |
2 |
|
Neither of us can decide how much to save for retirement. |
8 |
6 |
10 |
10 |
6 |
|
We have never talked about how much we need to save for retirement. |
24 |
31 |
30 |
21 |
13 |
|
None of these |
5 |
4 |
3 |
4 |
11 |
Note: Percentages may not add up to 100% due to rounding.
TABLE 4B
VIEWS ON SAVING FOR RETIREMENT—BY GENDER
"Thinking about how you and your spouse or partner view
retirement and how much you would need to save, which of the following best
describes you?"
Base: Married/Living With Partner And Not Retired
|
Total |
Male |
Female |
|
|
% |
% |
% |
|
|
I want to save more for retirement than my spouse/partner thinks is |
11 |
14 |
9 |
|
We are in agreement about how much we need to save for retirement. |
48 |
49 |
47 |
|
My spouse/partner wants to save more for retirement than I think is |
3 |
4 |
2 |
|
Neither of us can decide how much to save for retirement. |
8 |
6 |
9 |
|
We have never talked about how much we need to save for retirement. |
24 |
22 |
26 |
|
None of these |
5 |
4 |
6 |
Note: Percentages may not add up to 100% due to rounding.
TABLE 4C
VIEWS ON SAVING FOR RETIREMENT—BY INCOME
"Thinking about how you and your spouse or partner view
retirement and how much you would need to save, which of the following best
describes you?"
Base: Married/Living With Partner And Not Retired
|
Total |
Less |
$35K |
$50K |
$75K+ |
|
|
% |
% |
% |
% |
% |
|
|
I want to save more for retirement than my spouse/partner thinks is |
11 |
15 |
13 |
15 |
9 |
|
We are in agreement about how much we need to save for retirement. |
48 |
30 |
28 |
30 |
67 |
|
My spouse/partner wants to save more for retirement than I think is |
3 |
0 |
5 |
4 |
11 |
|
Neither of us can decide how much to save for retirement. |
8 |
10 |
9 |
14 |
5 |
|
We have never talked about how much we need to save for retirement. |
24 |
35 |
36 |
31 |
15 |
|
None of these |
5 |
10 |
9 |
6 |
2 |
Note: Percentages may not add up to 100% due to rounding.
TABLE 5
RETIREMENT SAVINGS VIEW BY THOSE WHO ARE RETIRED
"Now that you are retired, which of the following would
you say best describes you and your spouse/partner?"
Base: Married/Living With Partner And Retired
|
Total |
|
|
% |
|
|
My spouse/partner wants to spend more than I want to, given our |
8 |
|
We are in agreement about how much we can afford, given our retirement |
55 |
|
I want to spend more than my spouse/partner wants to, given our |
6 |
|
Neither of us can decide how much we want to spend in retirement. |
3 |
|
We have never talked about how much we want to spend in retirement. |
14 |
|
None of these |
14 |
TABLE 6
EXPECTED ANNUAL INCOME
"Based on your experiences in retirement, how much income
(from all sources) do you and your spouse/partner need annually to live
comfortably? If you’re not sure, please make your best estimate./How much income
(from all sources) do you believe you and your spouse/partner will need annually
in retirement to live comfortably? If you’re not sure, please make your best
estimate."
Base: Married/Living With Partner
|
Total |
Retired |
Married/Living With Partner |
|||||
|
Respondent Retired |
Respondent Not Retired |
||||||
|
Yes |
No |
Spouse/Partner Retired |
Spouse/Partner Not Retired |
Spouse/Partner Retired |
Spouse/Partner Not Retired |
||
|
% |
% |
% |
% |
% |
% |
% |
|
|
$49,999 or less (NET) |
27 |
49 |
29 |
59 |
32 |
33 |
29 |
|
$24,999 or less |
8 |
12 |
6 |
15 |
7 |
4 |
6 |
|
$25,000 to $49,999 |
27 |
37 |
23 |
44 |
25 |
29 |
22 |
|
$50,000 to $74,999 |
30 |
23 |
33 |
21 |
26 |
35 |
32 |
|
$75,000 to $99,999 |
17 |
15 |
18 |
12 |
21 |
16 |
18 |
|
$100,000 to $124,999 |
9 |
7 |
9 |
2 |
16 |
9 |
10 |
|
$125,000 to $149,999 |
4 |
3 |
4 |
4 |
2 |
1 |
5 |
|
Over $150,000 |
5 |
2 |
7 |
2 |
3 |
7 |
7 |
Note: Percentages may not add up to 100% due to rounding.
TABLE 7
CURRENT LIVING EXPENSES VS. EXPECTATIONS—BY REGION
"How do your current living expenses in retirement
compare with what you expected?"
Base: Retired Adults
|
Total |
Region |
||||
|
Northeast |
Midwest |
South |
West |
||
|
% |
% |
% |
% |
% |
|
|
Much/Slightly Higher Than Expected (NET) |
31 |
45 |
32 |
27 |
26 |
|
They are slightly higher than I expected. |
21 |
30 |
20 |
18 |
19 |
|
They are much higher than I expected. |
10 |
15 |
12 |
9 |
7 |
|
They are about the same as I expected. |
47 |
31 |
51 |
51 |
47 |
|
Much/Slightly Lower Than Expected (NET) |
22 |
25 |
17 |
22 |
27 |
|
They are much lower than I expected. |
9 |
6 |
2 |
12 |
13 |
|
They are slightly lower than I expected. |
13 |
18 |
15 |
10 |
14 |
Note: Percentages may not add up to 100% due to rounding.
TABLE 8A
CURRENT LIVING EXPENSES VS. EXPECTATIONS – BY RETIREMENT
STATUS
"Which of the following do you most rely on in your
retirement? Which of the following do you most expect to rely on in your
retirement?"
Base: All Adults
|
Married/Living With Partner |
||||||
|
Retired |
Not Retired |
Respondent Retired |
Respondent Not Retired |
|||
|
Spouse/Partner Retired |
Spouse/Partner Not Retired |
Spouse/Partner Retired |
Spouse/Partner Not Retired |
|||
|
% |
% |
% |
% |
% |
% |
|
|
My own personal savings/investments |
19 |
35 |
18 |
32 |
31 |
34 |
|
Social Security |
39 |
20 |
37 |
23 |
22 |
17 |
|
My employer-offered 401(k) |
3 |
24 |
3 |
3 |
31 |
29 |
|
My employer-based pension |
26 |
11 |
31 |
21 |
12 |
12 |
|
Other |
14 |
10 |
11 |
21 |
4 |
9 |
Note: Percentages may not add up to 100% due to rounding.
TABLE 8B
CURRENT LIVING EXPENSES VS. EXPECTATIONS – BY AGE
"Which of the following do you most rely on in your
retirement? Which of the following do you most expect to rely on in your
retirement?"
Base: Not Retired Adults
|
Not Retired |
|||||
|
Total |
18-34 |
35-44 |
45-54 |
55+ |
|
|
% |
% |
% |
% |
% |
|
|
My own personal savings/investments |
35 |
44 |
28 |
28 |
32 |
|
Social Security |
20 |
12 |
24 |
23 |
31 |
|
My employer-offered 401(k) |
24 |
26 |
28 |
23 |
16 |
|
My employer-based pension |
11 |
7 |
9 |
19 |
11 |
|
Other |
10 |
12 |
10 |
7 |
8 |
Note: Percentages may not add up to 100% due to rounding.
TABLE 8C
CURRENT LIVING EXPENSES VS. EXPECTATIONS – BY INCOME
"Which of the following do you most rely on in your
retirement? Which of the following do you most expect to rely on in your
retirement?"
Base: Not Retired Adults
|
Not Retired |
|||||
|
Total |
Less |
$35K |
$50K |
$75K+ |
|
|
% |
% |
% |
% |
% |
|
|
My own personal savings/investments |
35 |
32 |
30 |
35 |
41 |
|
Social Security |
20 |
30 |
31 |
18 |
6 |
|
My employer-offered 401(k) |
24 |
19 |
27 |
29 |
30 |
|
My employer-based pension |
11 |
7 |
7 |
12 |
17 |
|
Other |
10 |
12 |
5 |
7 |
7 |
Note: Percentages may not add up to 100% due to rounding.
Methodology: Harris Interactive® conducted online within the United States between September 4 to 6, 2007 among 2,321 adults (aged 18 and over). The details about the research methodology can be found on their website.
Source:
The Wall Street Journal Online / Harris Interactive Poll (2007) “Let’s Agree to Agree: Men and Women Share Views on How Much to Save for Retirement”. Copyright Harris Interactive Inc. All rights reserved.
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November 12 2007 11:55 am | Money Management and Retirement
