Respondents to a recent survey expect to retire, on average, at age 63, and many of them may retire with less than half the funds they believe they’ll need, meaning that “a comfortable retirement will be out of reach,” according to asset management firm Schroders.
For the company’s annual survey regarding the state of retirement readiness and planning, 2,000 US investors were queried to learn more about their concerns and retirement readiness.
The average age at which respondents said they expect to retire is 63.
Although most of the respondents who currently participate in a workplace retirement plan said they expect to need $1.2 million saved before retiring, 46% of the respondents said they realistically expect to have less than $500,000 in savings at retirement. Of those, 23% said that they will have less than $250,000 in retirement savings.
“While the magic retirement savings number is over $1 million for many plan participants, they are not saving or investing correctly to reach this goal. Without better planning and a roadmap to close the savings gap, a comfortable retirement will be out of reach,” Schroders Head of US Defined Contribution Deb Boyden said.
Workplace plans are the most significant means of saving for retirement for 70% of the respondents.
The survey also found that the upcoming presidential election has 88% of respondents concerned with how the outcome might affect their retirement savings.
“However, 32% say they will not make any changes to their retirement investments leading up to the election, 32% are unsure if they will make changes, and 28% plan to make their portfolio more conservative,” according to the report. “Just 9% of plan participants expect to get more aggressive with their retirement investments leading up to November.”
