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Many Americans are woefully underprepared for retirement — and it’s stressing them out.
The nonprofit Employee Benefit Research Institute’s 2017 Retirement Confidence Survey found that 24 percent of workers have less than $1,000 in household savings and investments, not counting the value of their primary home and any defined-benefit plans such as pensions.
That group is among 47 percent of workers with less than $25,000 in savings.
For the EBRI’s 27th annual Retirement Confidence Survey, released Tuesday, 1,671 people ages 25 and older in the U.S. were polled. The participants were primarily workers, but also included retirees.
Perhaps understandably, 31 percent of workers said they feel “very” or “somewhat” mentally or emotionally stressed about retirement preparation.
But the survey also points to several retirement factors that we have some control over, or that we can educate ourselves about to help alleviate stress over the unknown.
1. Retirement plans
Workers with a retirement plan (26 percent) are less likely to feel stressed about retirement preparation compared with workers without a plan (43 percent), the survey found.
Similarly, workers with a retirement plan or a spouse with a plan are more than twice as likely to be at least somewhat confident in their retirement prospects compared with workers without a plan.
For these statistics, the survey counted defined-benefit plans, defined-contribution plans like a 401(k) and individual retirement accounts (IRAs) as retirement plans. So even if you don’t have access to one of the first two types via your employer, you can still take advantage of an IRA.
To learn more about your options, check out:
- “5 Reasons a Roth IRA Should Be Part of Your Retirement Plan“
- “Confused by Retirement Accounts? Roth, Regular IRAs and 401(k)s Made Simple“
- “How to Get Started Investing When You Don’t Have Much Money“
2. Financial advice
Only 24 percent of workers and 39 percent of retirees have consulted a financial adviser who is paid through fees or commissions.
Granted, not all workers or retirees “somewhat” or “strongly” agree that advice from a professional financial adviser is in their best interest. But this concern alone isn’t necessarily good reason to avoid consulting an adviser.
You can learn all about how to find the right one in “How to Choose the Perfect Financial Adviser.”
3. Social Security income
Just 38 percent of workers and 62 percent of retirees have estimated how much they will receive in Social Security benefits at their planned retirement age, the survey found.
When and how you claim Social Security benefits can affect how much you’ll receive by as much as tens of thousands of dollars over the course of your retirement. So it’s worthwhile to invest a little time into doing some math before you retire.
The U.S. Social Security Administration’s website offers multiple free calculators that can help. Additionally, the Money Talks News Solutions Center offers help in obtaining a personalized report about how you can maximize your Social Security benefits.
What stresses you out most about retirement? Share your thoughts below or on Facebook.