Sunday, June 2, 2013
Retirement concerns continue to plague Americans
Despite improvements since 2009. worries about retirement finances still vex many Americans, especially those with less education and low income.
By Chad Brooks Wed, Oct 24 2012
Despite the economic improvements made since the end of the Great Recession in 2009, more Americans are worried about their retirement finances today than they were then, new research shows.
The study by the Pew Research Center revealed that nearly 40 percent of adults are not confident they will have income and assets for their retirement, up 13 percentage points from three years ago.
The research shows the decline in confidence is greatest among Americans with less education and those with annual family incomes between $30,000 and $74,999. When examined by race, the study found that Hispanics are slightly more confident than Caucasians and African Americans that they'll have enough money to last through their retirement.
In a shift from previous years, the research found that that concerns about retirement financing are now more heavily concentrated among younger and middle-aged adults than those closer to retirement age.
Specifically, more than half of those surveyed between the ages of 36 and 40 are not confident that their income and assets will last through the end of their working career, while less than 35 percent of those between 60 and 64 feel the same way.
An analysis of Federal Reserve data suggests that a reason that retirement concerns have surged among adults in their late 30s and early 40s is that the average wealth of this group has fallen at a far greater rate than for any other age group over the past 10 years.
Led by declines in the value of their homes, the research found that the median wealth of adults ages 35 to 44 was 56 percent lower (in inflation-adjusted dollars) in 2010 than it had been for their same-aged counterparts in 2001. At the same time, those closer to retirement, between the ages of 55 and 64, saw just a 22 percent drop in wealth.
Also contributing to the loss in wealth among adults in their late 30s and early 40s has been their failure to benefit from the rebound in stock prices that began after the recession. The data shows that a larger share of that age group dropped out of the stock market when things got bad and were on the sidelines as prices began to increase.
The study was based on Pew Research Center surveys of more than 2,500 U.S. adults and the Federal Reserve Board of Governors and the Department of Treasury's triennial Survey of Consumer Finances.