According to Gallup’s latest survey, workers in America have low expectations of living comfortably in their retirement, especially amid high inflation and recession fears. The survey indicated that just 43% of non-retired individuals believe that they will live comfortably in their retirement, bringing this figure to the lowest in 11 years since 2012. In comparison to last year, this sentiment has decreased by 10 points, including 5 points in the past year alone.
However, in contrast, Fidelity Investments has a strong outlook for the future of retirement security, based on first-quarter analysis. This is despite Gallup’s claim that economic conditions have often overshadowed the views of non-retirees.
The survey showed that the most significant financial concern among eight possibilities was having enough money for retirement, with over 70% of non-retirees worried to some degree about their ability to fund their retirement. Additionally, 42% of non-retired Americans stated that they were highly worried.
Even though 77% of retirees feel that they have enough money to live comfortably, concerns among non-retirees remain high due to economic conditions, including inflation. Gallup noted that concerns over retirement prospects were most notable among lower-income Americans, with a record-low of 19% stating that they expect to live comfortably.
Retirement prospects were more positive for men, those under 30, higher income individuals and college graduates. In contrast, women were less optimistic, with only 36% predicting comfortable retirement compared to 50% of men. The challenges faced by women include the tendency of women to live longer than men, getting underpaid compared to men during their careers, often taking time off work for family caretaking, and retiring earlier, often not by choice.
Gallup found that non-retirees were also much different from currently retired adults when it comes to their retirement funding. Six in ten retirees rely on Social Security as a primary source of retirement income, while only 34% of non-retirees expect to do so. According to the survey, the latter result underlined the growing concerns of Americans about the solvency of Social Security.
Retirees also differ from non-retirees in expecting a greater reliance on retirement savings accounts such as 401(k) or IRA since 2001 when Gallup first began to track this measure. Gallup found that almost half of non-retirees, around 48% of them, think retirement savings accounts will play a significant role in their retirement income. Non-retirees believe that they will depend more on such savings accounts instead of Social Security.
