More than one-third of the U.S. population is unprepared for retirement, a new poll found.
A total of 36% of Americans do not have savings earmarked for retirement, and 38% plan to work beyond age 65, a new TechnoMetrica Institute of Policy and Politics (TIPP) Poll found.
The percentage of people without retirement savings is highest among those earning less than $30,000 (61%), those whose highest education level was high school (55%), those in rural areas (51%), single women (50%), and Blacks (50%).
That percentage decreases as income rises.
The effects of people delaying retirements could be both positive and negative on the workforce and economy.
Older workers can offer experience and knowledge to more inexperienced colleagues, TIPP said. They also will delay their dependence on such programs as Social Security.
However, older employees also could prevent younger workers from moving up and could reduce the intake of new talent.
TIPP pointed out that the federal government is looking for ways to encourage lower-income and middle-class American — groups struggling to keep up with rising costs — to use tax-advantaged accounts.
Americans of earlier generations tended to work for one company their entire career, and were provided pensions that assisted retirement needs. But the fundamental employer-employee relationship has changed dramatically, and that earlier model is less common now.
TIPP said the country requires new programs that can adapt to the changing work habits and ensure all workers are cared for in retirement.
IRA and 401(k) accounts were the most popular retirement savings options, relied on by 37% of respondents.
In fact, the amount of money invested in 401(k)s increased to $6.7 trillion at the end of 2020, up from $6.2 trillion the previous year, according to the Investment Company Institute.
The number of active 401(k) participants, however, has not increased from an estimated 60 million Americans, since 2017.
As for other types of retirement savings, 14% mentioned cash-value life insurance, 14% said annuities, 13% had real estate investments, 13% cited taxable or private investments, 23% opted for other savings, and 36% said none.
A total of 38% of respondents said they plan to work after 65, while 45% said they don’t intend to work beyond that age, and 15% were not sure.
More than four out of 10 people with retirement savings plan to work after 65.
People most prepared for retirement included investors (3% unprepared), people earning $75,000 or higher (11%), and college graduates (17%).
Based on regions, 26% of people in the West were unprepared for retirement, followed by the Northeast (37%), Midwest (40%), and South (40%).
A person’s political party had little to do with retirement preparation the poll found, as 30% of Democrats and 30% of Republicans did not have enough savings for retirement. Independents/Others were at 40%.
In terms of ideology, 26% of conservatives were unprepared for retirement, followed by liberals (37%) and moderates (41%).
The TIPP Poll on the topic of retirement was conducted in April.
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