|by Nanci Hellmich, USA TODAY|
Many people are woefully unprepared financially for retirement, and they shouldn't count on working longer to make up the difference, a new national survey reveals.
Almost a third of workers (28%) say they have less than
Often people want to continue working until later in life, but the survey found that 50% of retirees left the workforce earlier than planned, and of those, 60% left because of health or disability problems and 27% because changes in their company such as downsizing or closure.
In fact, 67% of workers say they expect to work for pay during their retirement years, but only 23% of retirees report they have ever worked for pay in retirement.
"People keep saying, 'I'm not saving so I'll plan on retiring much later,' but often times for reasons they can't control, people are not able to retire as late as they want," says
It's risky to say that you're going to defer saving because you'll retire later, he says. "You can control whether you save today. You often can't control whether you'll retire later."
He says that EBRI's research for more than a decade has shown that one of the best predictors of retirement planning success is how many years you are eligible to participate in a retirement plan, such as a 401(k), 403(b), or pension.
The new survey found that 44% of people without a retirement plan are not at all confident that they have enough money saved for retirement vs. only 14% of those with a retirement plan.
Overall, about two-thirds (64%) of workers admit they feel they are behind schedule when it comes to planning and saving for retirement. Yet only 48% say that they and/or their spouses have tried to calculate how much money they will need to have saved by the time they retire so they can live comfortably.
The top reasons people give for not saving more: Cost of living and day-to-day expenses.
Another big issue: Debt. About half of workers (51%) and a third of retirees (31%) indicate they have a problem with their level of debt, including mortgages, credit card debt and car loans. "There is a huge association between debt and retirement confidence," VanDerhei says.
That said, 69% of worker says they could save
Saving this much could add up to an additional
"The earlier you can start saving, the better. Allocating money for retirement can have the snowball effect — meaning it may not seem like much is happening at first, but as a result of compound interest, those savings will eventually build up to form a large base of cash," he says.
To get on track with their retirement savings, people need to figure out how much they need to save and whether they are on track, but half of workers haven't done that, says
Doing these calculations "may seem intimidating and time consuming" but many companies, including his, offer tools to make it easier. Investing time in this is good for everyone, he says.
Vandermillen recommends automatically funding your 401(k) or your IRA so you don't have to make a decision about it every month, and automatically increasing that amount every year.
Other findings from the survey:
• Of those workers who say that they and their spouses have a retirement plan, such as a 401(k) 403(b), pension or IRA, 35% say they've tucked away at least
• 56% of workers expect to be able to manage in retirement with no more than 70% of their pre-retirement income; 23% expect to be able to manage with 70%-85%.
• 40% of workers say they spent eight hours or more planning for the holidays this past year, while only 34% spent that much time planning for retirement.
• 63% of retirees say
• 35% of retirees have less than