It’s no news that many of us are not saving enough money these days, but a new statewide survey of Washington adults shows an alarming gap between what we think our financial futures hold and how prepared we are for the journey.
According to the new AARP survey, Ready or Not – 2016 Survey of Retirement Readiness Among Washington State Adults, more than half (55%) of Washington adults say they are anxious about their financial security during retirement. “Given how little many of us are putting away for our retirement years, it makes sense that consumers feel anxious about their financial futures,” said AARP State Director Doug Shadel. “But it’s even more troubling to see how many Washingtonians are unaware of just how unprepared they are.”
Regardless of anxiety, AARP’s survey shows more than three-quarters (77%) of Washington adults are at least somewhat confident they will retire someday and leave paid employment behind.
Among the reasons for their optimism about their retirement futures, seven-in-ten Washington adults say they are confident they are currently saving enough to retire. However, the survey revealed that almost half of Washington adults have saved less than $25,000 for retirement. One quarter have less than $5,000 saved. Two-thirds of those surveyed have never calculated how much money they need to save for retirement.
With savings rates continuing to decline nationwide, four-in-ten of Washington adults have a different plan to make up the shortfall, including investing, starting a new business, receiving an inheritance or winning the lottery (9%).
AARP released the report on September 21 at the launch of their MoneySmarts campaign, where they kicked off the statewide series of public information events to a capacity crowd of nearly 300 people at the Museum of Flight. In addition to the events, the organizations are sharing consumer tips on saving, investing and protecting finances at aarp.org/MoneySmarts
“We all know we should be saving more, but that’s easier said than done,” said Shadel. “Not only is the marketplace designed to get consumers to spend not save, leading psychologists will tell you that humans are hardwired to prefer immediate gratification over something that may occur in the future.”
According to AARP’s survey, more than one-quarter of Washington adults say retirement seems so far away that they will just get to it later.
One of the best ways to build an income nest egg for retirement is to save while working. Unfortunately, nearly a quarter of Washington adults report they do not have a way to save for retirement at work. Some relief may be on the horizon for employees of small businesses. In early 2017, Washington state will be the first in the nation to offer a market-based approach to make it easier and less expensive for small businesses to offer retirement savings options to their employees. Under the “Washington State Small Business Retirement Marketplace,” employers with fewer than 100 employees will have access to a “marketplace” of retirement plan options for their employees. Participation in the marketplace will be voluntary for both employers and employees, and the accounts will be portable, allowing employees to take their plans with them if they switch jobs.
While the marketplace will help employees, it also promises to give a boost to employers who choose to offer a plan. According to the survey, Washington adults without access to workplace retirement savings overwhelmingly say they would use a tool if available to them.
