Making its way to President Donald Trump's desk this week is The Setting Every Community Up for Retirement Enhancement Act of 2019, and if approved, the legislation will have major implications for the retirement of Americans and how advisors work with retirees going forward. What’s the state of the retirement landscape? The Transamerica Center for Retirement Studies recently released its comprehensive retirement survey of American workers, and the results show that the SECURE Act could not come soon enough.
The 222-page compendium found that workers have saved an estimated median of $50,000 in all household retirement accounts, although that figure differs across demographic segments.
Just 65% of workers at for-profit companies have access to a 401(k) or similar plan, including 71% of full-time employees and just 45% of part-time employees.
“Many U.S. workers are continually at risk for not achieving a financially secure retirement,” said Catherine Collinson, CEO and president of Transamerica Institute and TCRS. “Policymakers are taking action to strengthen our retirement system, by expanding access to employer-sponsored workplace savings plans and making it easier for workers to plan and save. It is also imperative that policymakers begin devoting attention to addressing Social Security’s projected funding shortfall.”
More than a quarter of workers (28%) say they’ll rely on Social Security as their primary source of income in retirement. That’s more pronounced for baby boomers, at 42%, those with household income of less than $50,000 (40%), non-college graduates (35%) and women (32%).
Overall, the survey points to changing trends in retirement. In fact, many workers don’t expect to retire at all. Fifty-four percent said they plan to work past age 65 or not to retire. More than half (55%) plan to work in retirement, whether that’s part time or full time. Fifty-three percent of workers want to do so because they want the income.
Sixty-four percent of employees have a retirement strategy, but only 19% have a written strategy, according to the survey. More than four in 10 part-time workers (43%) have no retirement strategy. Further, 62% of workers don’t have a backup plan for retirement income if they’re unable to work before their planned retirement.