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One-Third of Americans Say Social Security is Their Retirement Plan
Tuesday, October 29, 2013 7:00 AM

A hefty 34 percent of middle-class Americans thinks they will work until at least the age of 80, because they haven't saved enough for retirement, according to a Wells Fargo study survey conducted by Harris Interactive. That's up from 25 percent in 2011 and 30 percent in 2012.

And 37 percent say they'll never retire and will work until they are too sick or die.

Meanwhile, a 59 percent majority of the middle class say paying monthly bills is their chief day-to-day financial concern. That's up from 52 percent last year.

Saving for retirement takes second place, with 13 percent calling it a priority. Overall, 42 percent say saving for retirement and paying bills concurrently is impossible.

Thus 48 percent don't have confidence that they will be able to save enough for a comfortable retirement.

In the survey, 52 percent of the middle class say they are confident they will save enough for retirement. But only 29 percent say they have a written plan. Among those who have a written plan, 70 percent feel confident about their retirement, while only 44 percent of those who don't have a plan feel confident. Of those who have a plan, 91 percent say they have willpower to save, compared with 75 percent for those who don't have a plan.

In the key 40-to-59 demographic, those who say they have written a plan also say they have saved $63,000 for retirement, while those who say they haven't written a plan say they have saved $20,000.

One-third of the middle class say Social Security will be their "primary" source of income in retirement.

Further, 40 percent say a large unexpected healthcare expense represents their biggest retirement fear, while 37 percent list the loss or reduction of Social Security as fear No. 1.

As for the stock market, only 24 percent of the middle class view stocks as a good investment for retirement. Meanwhile, 45 percent say "the stock market doesn't benefit people like me."

A majority (52 percent) say they shun stocks because "I am afraid to lose my nest egg in the ups and downs of the market."

Surprisingly enough, fear of the stock market is more intense among those aged 25 to 29, with 56 percent of them afraid they would lose their savings in equities. Asked what they would do with $5,000 given to them for retirement investment, 58 percent of people in this age group say they would allocate it to a saving account or certificate of deposit.

Helpful Resources: The Cornerstone Credit Union League’s Nov. 12, Managing IRA Beneficiary Designations & Distributions webinar.