Planning for retirement starts earlier and is more creative
While the mean age for beginning retirement planning is 33.3 years old, young people say they are planning for retirement earlier. The median age at which 18- to 34-year-olds begin planning is 23.6; for 35- to 44-year-olds it jumps to 29.1; for ages 45-54 it is 35.6; and for those ages 55 and older, the median is 42.8.
Among the steps taken by those who plan to retire, 29 percent say they are contributing to an employer-sponsored account such as a 401(k), 21 percent have opened a separate retirement savings account or a Roth IRA, and 20 percent are investing in taxable stocks, bonds, mutual funds or annuities. Only 10 percent say they have worked with a financial adviser or other professional to develop a retirement plan. Respondents in the 45 to 54 age group are the most active with the things they are doing to prepare for retirement. Of all the age groups, they are most likely to be working with an advisor (15%) and planning the type of work they'll do when they retire (18%).
According to Natalie Jobity, Vice President of Financial Services at Harris Interactive, "These results are consistent with other research we have done on consumer retirement planning. People simply are not taking retirement planning as seriously as they should and quite a significant proportion still think that Social Security will be there as an income source when they retire. This is why getting advice from a financial professional is so important yet so few are tapping into that resource."
Information and knowledge seem to inspire planning for retirement
Respondents with a college degree and those with the highest incomes are most active in retirement preparation. Seventy percent of college graduates and 75 percent of respondents with income over $75K have begun planning, compared to 50 percent of the total population. Furthermore, college graduates and income earners of over $75K are also twice as likely to be working with a financial planner on retirement needs (20% each vs. 10% of the total population).
Conversely, respondents with just a high school education or less are least likely to have started planning for retirement, with only 35% of respondents doing so (compared to 50% for the total population). This group is also most likely to claim they do not intend to retire (16% vs. 10% of the total population), which may explain why they have not begun planning for retirement. Additionally, one-third (33%) of respondents who make under $35K have not started to plan for retirement.
