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Retirement doesn’t look too rosy for many

The golden years of retirement may not be so golden. At least, that’s what most people fear.

The 17th Annual Transamerica Retirement Survey found that 45 percent of Baby Boomer workers expect a drop-off in their standard of living when they call it quits. And the pessimism doesn’t get much better among other generations.

Eighty-three percent of Generation X workers believe they will have a harder time achieving financial security than their parents' generation. Among millennial workers, the youngest generation in the workforce, only 18 percent are very confident about their future retirement.

"Although the Great Recession ended years ago, millions of Americans are still regaining their financial footing," said Catherine Collinson, president of TCRS. "As each year passes, people's fears about our current retirement system come more sharply into focus."

Collinson added that workers are struggling with retirement security because of "the wobbly three-legged stool comprising Social Security, employer-sponsored retirement benefits and personal savings." The report, titled "Perspectives on Retirement: Baby Boomers, Generation X, and Millennials," is considered one of the largest and longest-running national surveys of its kind. Among the report’s findings:

▪  Sixty-one percent of workers say they haven’t fully recovered from the Great Recession.

▪ Seventy-seven percent of workers worry that Social Security won't be there when they retire.

▪ Only 51 percent of workers say they are building a large enough retirement nest egg.

▪ Sixty-five percent believe that even if they could work until age 65, they still will not save enough to meet their retirement needs.

So what do workers plan to do to make ends meet in retirement? Work more, apparently. The survey found that 38 percent of workers are counting on income from continued work during their retirement – and 15 percent are expecting it to be their primary source of income in retirement.

"Amid retirement savings shortfalls, American workers are attempting to prop up our system's three-legged stool by adding a fourth leg: working during retirement," Collinson said.

Each generation varies in their approach to retirement income, however. Eighty-seven percent of Baby Boomers are counting on Social Security to be a source of their retirement income, including one in three who expect it to be their primary source of income. One-third say they will have income from a traditional pension plan, while 78 percent will draw from other retirement accounts such as 401(k)s, 403(b)s, IRAs and other savings and investments.

Among Generation X, those born between 1964 to 1978, workers have adapted to fewer pension offerings. Hence, 77 percent of Generation X workers are saving for retirement and they started at age 28. Among those participating in a 401(k) or similar plan, the savers contribute seven percent of their annual pay. However, 30 percent of these retirement plan participants have taken a loan or early withdrawal from these plans and also have low levels of emergency savings.

Millenials, the generation between 1979 and 2000, appear to be good savers. Seventy-two percent of those who are working have started saving – at the comparitavely young age of 22. Of those who have access to a 401(k) or similar plan, 72 percent participate, contributing a median seven percent of their annual pay. An impressive 30 percent contribute more than 10 percent of annual pay. The total household retirement savings among millennials is a median of $31,000.

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