Money Plant: Where Do Americans Bank?
Money Plant: Where Do Americans Bank?
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| Photo by Karolina Grabowska |
Americans are generally optimistic about retirement, but according to a recent survey, many people still have a long way to go before they can leave the workforce.
Americans are generally optimistic about retirement, but according to a recent survey, many people still have a long way to go before they can retire.
For example, 7 percent of respondents said their retirement savings will last 10 to 20 years. These numbers look promising until you consider that people should actually plan for 30 years. Similarly, nearly half of all Gen X respondents said they expect to have a pension when they retire. The plan may sound good, but experts warn that many American pension plans are at risk. In addition, less than a third of all companies currently offer pension plans.
The survey was sponsored by the American Institute of Certified Public Accountants (AICPA) to better understand the American public's approach to saving and retirement. The group sponsors a website called 360 Degrees of Financial Literacy (www.360financialliteracy.org), which helps people deal with financial problems at various stages of their lives. Here are some additional survey results:
Paying for Retirement
Younger Americans do not plan to rely on Social Security as much in retirement as older Americans. Nearly six in 10 people age 55 and older plan to fund their retirement with Social Security. Only four in 10 (1 percent) of Americans under 55 rely on Social Security to fund their retirement. Instead of relying on Social Security, those under 55 are more likely to rely on their personal savings and investments.
College Costs
About 3 in 10 Americans have a child who plans to attend college in the next 5 to 10 years. A quarter of these parents plan to pay for their child's education with personal savings, and another quarter plan to earn scholarships to pay for tuition. Surprisingly, only 13 percent of those surveyed plan to use a private student loan, and only 12 percent plan to finance their child's education through financial aid.
Financial concerns
Rising energy and home heating costs and uninsured medical costs are the top financial concerns for Americans (both 15 percent). Then comes retirement and the price of gas (both up 13 percent). Education costs are also a concern, as 9 percent of respondents worry about their child's higher education and 7 percent worry about their own higher education.
1 percent of Americans under 55 plan to rely heavily on Social Security in retirement.
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