Only half of American workers and retirees could come up with $2,000 if they needed it for an emergency, according to a new study that shows confidence by Americans to be able to retire comfortably is now at an all-time low.
Saving for retirement continues to take a back seat as many Americans still struggling through the economic crisis jockey to make ends meet and hold on to their jobs, according to the 2013 Retirement Confidence Survey by the Employee Benefit Research Institute.
While half of the 1,200-plus workers and retirees interviewed in January 2013 have some confidence that they will be able to live comfortably in their retirement, only 13 percent are “very confident.”
One-fourth of those interviewed are “not confident at all” that they will be comfortable in retirement, and another 21 percent are “not too confident.”
The reality of just how much it will cost to retire seemed to impact many respondents. More than half had never tried to calculate how much they will need, and only one in four had obtained investment advice.
Many of them said they would need to begin huge savings programs to be ready. One quarter said they would need to save in excess of 30 percent of their income, and another 20 percent said they would need to save more than 20 percent.
Only 2 percent of workers and 4 percent of retirees identified saving for retirement as their most pressing financial issue.
In addition to day-to-day living expenses, a high level of debt is also standing in the way of saving for 55 percent of workers and 39 percent of retirees.
For households with incomes under $35,000 annually, today only one in four puts away some savings for retirement compared to half five years ago. At higher income levels, the amount saved during the same period declined slightly and remained steady at incomes of more than $75,000.
A first place to start for people concerned about their retirement is to begin focusing on their future financial needs by first determining how much money they will need in retirement, and then meeting with a financial adviser to explore avenues for reaching their goals.