Pre-retirees have a lot of work to do when it comes to saving for retirement, according to a new report. Less than a third (32%) of American workers age 50 and older are "very confident" they'll have enough money to cover their expenses in retirement.
Pre-retirees have a lot of work to do when it comes to saving for retirement, according to a new report.
The study, from AARP, shows less than a third (32%) of American workers age 50 and older are “very confident” they’ll have enough money to cover their expenses in retirement. Another 41% say they are at least “somewhat confident.”
However, only 34% said they are saving for retirement to a “large extent,” and 57% say they plan to work past the age of 65. In fact, 18% said they never plan to retire.
The survey highlights healthcare costs as a particular problem.
“Our survey shows that Americans haven’t planned enough for health expenses in retirement,” said Debbie Banda, the association’s vice president for financial security. “Even though these costs can have a significant impact on retirement savings, families and individuals often struggle to save what they need because they are paying other necessary expenses or helping to support other family members or loved ones.”
In fact, only 38% of respondents said they’re not saving for healthcare costs, and 44% said they have no plans to do so in the future.
Even within the majority of workers who are currently saving, 55% say they are worried they won’t be able to afford healthcare costs in retirement. Women tended to be worried at a higher rate (61%) than men (51%).
When asked how they will pay for healthcare costs, workers generally expected to use a variety of sources, such as Medicare, retirement savings, and social security income. However, 10% said they didn’t know which source they would rely on most, and few expected those sources would cover all of their costs.
“When faced with future healthcare costs, many people are either overwhelmed or overconfident,” Banda said. “Thinking that your healthcare will be paid for by Medicare alone or avoiding healthcare planning altogether are not the right solutions.”
Once financial resource survey respondents don’t expect to use is family members. Nearly 90% said they don’t plan to ask family members to cover their medical costs. AARP said that finding is in line with a general feeling on the part of retirees that they don’t want to become a physical or financial burden to their families in later life.