Older workers feel on track

Yet new survey indicates retirement nest eggs depleted

Buoyed by record-high stocks and nearly eight years removed from the Great Recession, most middle-aged and older Americans say they’re at least somewhat prepared for retirement.

But a closer look at their plans, concerns and nest eggs reveals that many may not be as well-equipped as they believe.

Fifty-nine percent say they’re very or somewhat prepared for retirement, according to an Ipsos/USA TODAY survey of 1,250 adults ages 45-65 conducted in mid-January. And 65% are very or somewhat confident they’ll have enough money to tide them through their golden years.

What’s more, more Americans seem to be backing up their words with action. Sixtyfive percent of those surveyed say they’re very or somewhat likely to put at least $100 toward retirement over the next six months, the second-mostlikely expenditure behind paying off debt.

“It’s encouraging to see people are starting to think about retirement,” says Aaron Rheaume, a certified financial planner at the Financial Enhancement Group. “Some people stayed out of the market and didn’t feel they wanted to invest because of the recession. Now people are starting to play catch-up.”

The downturn of 2007-09 left nearly 9 million Americans out of work and U.S. stocks down by more than 50%. But all of those jobs have been recovered, and 7 million more have been added.

The 4.7% unemployment rate is less than half the 10% peak in 2009. And the Dow Jones industrial average hit a record 20,000 last week, triple its recession-era nadir.

Yet the economic recovery has been tepid, leaving out or

“It’s encouraging to see people are starting to think about retirement.” Aaron Rheaume, financial planner

squeezing many workers. Many of those laid off are in part-time or lower-level positions, or drifting in and out of the labor force. Many depleted their nest eggs to pay living expenses while they were sidelined. Wage growth for most U.S. workers has been meager until recently.

All of that has taken a toll. Twenty-seven percent of the 45to 65-year-olds surveyed have no retirement savings or investments and another 22% have less than $100,000. About 14% have at least $500,000 and 5% have $1 million or more.

By contrast, nearly 50% believe they’ll need at least $500,000 to be comfortable and about a quarter say they’ll need at least $1 million.

Rheaume says there’s no one-size-fits-all benchmark for a retirement fund — despite the oftcited $1 million standard — adding it depends on the retiree’s lifestyle and spending patterns. Still, he says, the number of aging Americans with less than $100,000 “is very concerning.”

Not surprisingly, there’s a stark contrast between lower- and higher-income workers. Of those earning $50,000 or more, 84% have retirement savings, compared to 45% of those with lower salaries, the survey shows.

Many people are aware they’re falling short, with 77% strongly or somewhat agreeing they’ll need to save more to afford the retirement they want. So how can their seemingly inadequate savings and worries be squared with their overall confidence in their belief they’re on track?

While the economic recovery and market rally have left many people better off, “I think (many others) are kidding themselves,” Rheaume says. “We’ve had seven years of a pretty good economy and market, and people are feeling good.” But he adds, “Are they doing the math?”

Donald St. Clair, a certified financial planner at St. Clair Financial, says, “There’s a certain amount of dissonance ... People are suffering. People are behind. They know they don’t have enough. But they don’t know how to deal with it.”

Susan Farrow, 60, a part-time medical writer in Chattanooga, Tenn., says she’s “somewhat prepared” for retirement. Farrow and her husband, Doug, a life insurance salesman, are paid about $90,000 from their jobs and her disability income. (People on disability can earn a limited amount of income.) And they’ve put about $275,000 to $300,000 in annuities and 401(k) plans for retirement. That should generate $15,000 to $20,000 a year to supplement an estimated $30,000 or so in Social Security when they hang it up within five years.

Their retirement income “will be less but when you think of expenses you have when you’re working (such as clothing and gasoline), that’ll be different,” Susan says.

After Doug was out of work for several months last year, “It was pretty scary,” Susan says. Now, “It’s all about retirement,” she adds. “It’s not like we’re looking at life like — let’s get a new car or go on an expensive vacation.”

Here’s proof many Americans know they need to do more to catch up: While 43% plan to retire by age 65, a roughly equal share say they’ll wait until 66 or older. “If you looked at that in 2000, a lot more people were thinking of retiring earlier than 60,” St. Clair says.