Americans Say Lawmakers Don’t Understand Difficulty in Preparing for Retirement

Americans fear the nation faces a retirement crisis, with 80% of Democrats saying this is the case and 75% each of Republicans and Independents agreeing with this, according to a new report from the National Institute on Retirement Security (NIRS), “Retirement Insecurity 2019: Americans’ Views of the Retirement Crisis.”

Overall, 75% of Americans say the nation faces a retirement crisis, and 58% are either very or somewhat concerned they will not be able to achieve a financially secure retirement. Fifty-six percent of Americans say it is getting harder to prepare for retirement.

Asked what is impacting retirement in a negative way, 74% say it is the cost of health care in retirement, 66% say it is the rising cost of long-term care, 61% say Middle class workers’ salaries are stagnant, 57% say increasing debt, and 57% say longevity. Additionally, 56% say fewer people have pensions, 51% say it is shifting the responsibility to save for retirement to the individual, and 37% say it is a more volatile stock market.

Seventy-three percent say they do not have the financial skills to manage their money in retirement, and 79% say retirees don’t know enough about investing to ensure their retirement savings last throughout retirement. Seventy-seven percent think employers should increase their matches to 401(k) plans, and 61% would sacrifice pay if it meant guaranteed income in retirement.

Seventy percent say the average worker cannot save enough on his own to guarantee a secure retirement, and 65% expect they will have to work past retirement age.

Roughly two-thirds of Americans believe that pension plans do a better job of preparing people for retirement than 401(k) plans. Eighty percent of Democrats, 81% of Republicans and 75% of Independents have favorable views towards pension plans. Seventy-seven percent think that people with pensions are likely to feel more comfortable retiring than those with individual savings. Eighty percent think the government should make it easier for employers to offer pensions.

Eighty-two percent think police officers and firefighters deserve pensions because of the risky jobs they perform, and 74% think they deserve pensions because of the low pay they earn. Seventy-nine percent of Americans think all workers should have a pension, and 83% think pensions are a good way to attract workers to state and local jobs.

Eighty-seven percent of Democrats, 81% of Republicans and 84% of Independents think Washington lawmakers don’t appreciate how hard it is to save for retirement. Overall, 84% of Americans say leaders in Washington do not know how hard it is for Americans to save for retirement. More than half think the government needs to increase Social Security contributions from both employers and workers, and only 34% think the new tax law is improving their financial prospects.

Seventy-one percent of Americans think that state-based retirement plans are a good idea, and 74% say they would participate in such plans.

Millennials are the most worried about a financially secure retirement (72%) and is the generation most willing to put away more money now for retirement (60%). They are also the generation most likely to believe they will have to work past normal retirement age (77%). More than half of Millennials are willing to save half or more of their salary—more than double the response from Baby Boomers and Generation X.

Greenwald & Associates conducted the online survey of 1,250 adults for NIRS in January. The full report can be downloaded here.