The term “retirement readiness” has becomes such a hot topic in recent years that it is now requiring a new definition. For most people today, saving enough to retire at age 65 is not realistic, and this year’s Annual Retirement Survey by Transamerica finds that while most people are committed to saving for retirement, only 39% of workers are confident they are building a sufficient nest egg.
Overall, Americans expect to work longer, work in retirement, and they lack communication among family members to address their retirement plans and strategies.
“The big story is the need to update our thinking about retirement readiness,” said Catherine Collinson, president of Transamerica’s Center for Retirement Studies in a call with press members. “For many, saving enough to retire at 65 is not realistic. Most people have changed their expectation of retirement in planning to work past 65 or continue working after they are retired.”
The recession has made people less confident overwhelmingly, at 64% of those surveyed. More than 60% agree their nest egg is not sufficient and 43% reported having to retirement strategy (see chart below), in writing or not.
“Family relationships are a vital support system. However, the survey found that few workers “frequently” discuss planning and saving for retirement with family and close friends,” the study found. “Of note is that 31% of workers in their 20s expect to financially support their parents when they retire. However, only 4 percent of workers in their 50s and 60s expect to receive support from their children, illustrating the need for family members to have an open dialogue and build a common understanding.
Those who expect to rely on home equity as a their primary retirement income source is very low, the study finds, at around 1% of working adults surveyed.
Written by Elizabeth Ecker