Retirement Worries Grow; 30-Somethings Most Uneasy

retirement worryBy HOPE YEN

WASHINGTON (AP) - Younger Americans in their late 30s are now the group most likely to doubt they will be financially secure after retirement, a major shift from three years ago when baby boomers nearing retirement age expressed the greatest worry.

The survey findings by the Pew Research Center, released Monday, reflect the impact of a weak economic recovery beginning in 2009 that has shown stock market gains while housing values remain decimated.

As a whole, retirement worries rose across all age groups - roughly 38 percent of U.S. adults say they are "not too" or "not at all" confident that they will have sufficiently sized financial nest eggs, according to the independent research group. That's up from 25 percent in 2009.

But the concerns are increasing the greatest among younger adults approaching middle age, whose equity in their homes represents most of their net worth. About 49 percent of those ages 35-44 said they had little or no confidence that they will have enough money for retirement, more than double the 20 percent share in that age group who said so in 2009.

Baby boomers born between 1946 and 1964 also reported having more retirement anxieties than before, but now to a lesser degree compared to their younger counterparts. About 43 percent of Americans ages 45-54 expressed little or no trust in their retirement security, up from 33 percent in 2009. Among Americans ages 55-64, the share expressing little or no confidence was 39 percent, up from 26 percent.

Broken down by smaller groups, the Pew analysis found that retirement worries peaked among adults in their late 30s; a majority, or 53 percent, of Americans ages 36 to 40 lacked confidence that they will have large enough nest eggs. Just three years ago, it was baby boomers ages 51 to 55 who had the most anxiety over whether their income and assets would be sufficient.

Richard Morin, a senior editor at Pew who co-authored the report, said the shift in attitudes was somewhat surprising.

"I think most people would expect those on the cusp of retirement - ages 55 to 64 - would be the most concerned about financing their retirement, (so) the finding that the peak is now occurring among adults roughly 20 years younger is notable," he said. "Moreover, the wealth data showing those approaching or in early middle age had lost the most in the past decade suggests that their concerns are not misplaced."
Morin said that it is hard to predict whether 30-somethings will continue to express the most retirement worries in the years to come, but said it was a "real possibility" given that housing values aren't expected to fully recover anytime soon.

The latest findings come as the presidential campaigns focus most often on retirement issues such as Social Security and Medicare when appealing to older voters. In recent weeks, President Barack Obama has pounded Republican challenger Mitt Romney and his running mate, Rep. Paul Ryan, saying their plan to replace Medicare with vouchers won't keep up with health care costs. Ryan has sought to reassure seniors by saying that he and Romney won't alter Medicare for those in or near retirement.

An Associated Press-LifeGoesStrong.com poll in late 2011 also found that concerns about retirement were increasing across all age groups, a reflection of the continuing hard economic times.

According to the Pew report, the inflation-adjusted net worth of Americans ages 35 to 44 fell roughly 56 percent from 2001 to 2010, the sharpest decline for any age group and more than double the 22 percent rate of decline for boomers ages 55 to 64. Net worth, also referred to as wealth, is the sum of all assets such as a house, car, stocks and 401(k)s, minus the sum of all debts including mortgage, credit card debt, car and tuition loans.

In dollars, the median wealth of Americans ages 35 to 44 fell by $56,029 to $43,698 over the past decade. In contrast, those ages 45 to 54 and 55 to 64 lost about $50,000. The median wealth of those 65 and older over the past decade increased slightly - the only age group to experience a gain.

The 35 to 44 age group has been hit the hardest in terms of wealth because they were the ones most likely to have purchased a home at bubble prices during the housing boom, only to see values shrivel in the housing bust. This younger to middle-aged group also largely stayed out of the stock market from 2001 to 2010 and as a result missed out on the stock run-up that began in 2009, according to Pew's analysis of Federal Reserve data.

The S&P 500 index peaked above 1,500 in October 2007 but then fell to a closing low of 676.53 in March 2009. It has risen significantly since then, closing above 1,200 in December 2010 and is now back above 1,400.

Broken down by education and income, adults holding a high school diploma or less were less likely to express confidence in their retirement finances than college graduates, 53 percent vs. 71 percent. Those with family incomes of less than $50,000 also were less confident compared to those making $100,000 or more, 51 percent vs. 79 percent.

The Pew study is based on interviews with 2,508 adults by cell phone or landline from July 16 to 26, as well as an analysis of the Survey of Consumer Finances, which is sponsored by the Federal Reserve. The Pew poll has a margin of error of plus or minus 2.8 percentage points, larger for subgroups. The AP-LifeGoesStrong.com poll was conducted Oct. 5-12, 2011, by Knowledge Networks of Palo Alto, Calif.

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AP Deputy Director of Polling Jennifer Agiesta contributed to this report.

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Online:

Link to Pew report: http://tinyurl.com/96295h5

AP-LifeGoesStrong.com poll from 2011: http://tinyurl.com/8v8qrwh

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17 Comments

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rolando4rocks

The entire "RETIREMENT" idea,and planning for something that intensly that is 40-50 years off is ludicrous at best.EVERYONE that can afford to SAVE $$ for the future should do so;but NOT IN EXCESS.You have a large population of people saving everything they can,and in effect,GOING WITHOUT many things they could use NOW,to save for a day that MAY NEVER COME.Believe me,the 2 BEST things you could EVER DO for retirement is...HAVE YOURE OWN BUSINESS TO LIVE ON...PAY OFF YOUR HOME...If you have these two things,you'll enjoy a more secure retirement

October 24 2012 at 5:48 AM Report abuse +1 rate up rate down Reply
lifehub

Obama intends to stick it to everyone---libs included. He holds no special place in his heart for you characters.

October 24 2012 at 4:48 AM Report abuse +3 rate up rate down Reply
oneshot5555

Can't blame them for being worried. Many have huge student loan debt, low wages and at least two more major market crashes coming before they will retire, why wouldn't they be worried.

October 24 2012 at 3:07 AM Report abuse +1 rate up rate down Reply
David & Patty

Employees should prepare for retirement in their their mid to late twenties. When I was in my twenties and someone told me to save for retirement, I was offended. I wan't old and that was too far ahead to think about. So I spent every penny on saving for a home and providing for the needs of my family. By the time I was in my late-thirties, I began computing how much I would live on as an old man and adding 3% inflation every year. My conclusion was that I better put as much into a 401K as I can live with because I was going to be SHORT on money if I retired in my mid-sixties. I was lucky enough to put money in my 401K and keep my job to get a pension at retirement. The must-do objectives for me were (1) keep working for one good company instead of switching from one job to another (2) do well in your job to keep it (3) save money in my 401K because the future was too uncertain and I was NOT going to just live on SS. In my early sixties I discovered I had one pension for one job, another pension when I retired from current job, my 401K had grown, and I estimated my SS and it was impressed since I had been paying into it since I was 16. In addition, my wife had pensions from two jobs though small, and she collects SS. The one problem that sved me from disaster in 2008-2009 when the DOW fell very low was that I learned that if my 401K was decreasing 3 days in a row, PULL YOUR MONEY TO A FIXED ACCOUNT, DON'T LEAVE IT IN A DROPPING MUTUAL FUND. Pull out wehn an unacceptable threshold is rached. That's how I saved my 401K.

October 24 2012 at 12:32 AM Report abuse +1 rate up rate down Reply
rcohan

America doesn't like to speak about pensions to much, because that benefit is reserved for city, state and federal jobs, where everyone gets to retire at 62 supported by their pension plus SS, with savings added on as an "extra" not what they are depending on. They all get excellent healthcare benefits. A pension is crucial for retirement but you won’t learn that in public school or anywhere else. If you are young then take this advise seriously. Do whatever you have to do to get a pension. Average salaries for the government are a lot higher than they use to be. Apply for government jobs or move to Canada because in Canada everyone gets to retire with both company and state pensions. They don't base their entire lives on saving enough money to not be homeless when their old or working till they die. America used to be great but inflation grew at ten times the rate of salaries making it all but impossible to save in today’s America. The average American lives in fear scrimping and hoping they can make it through old age. It's a terrible way to live. In fact it's horrible. The 5 happiest countries are listed below. It's plain to see the common denominator is some form of socialism. People in these countries don't live their entire lives in fear. The culture that surrounds them is not sink or swim. They are able to live happy lives knowing they can retire when they are older. If they save money it's simply a bonus to their retirement and not what their lives are depending on. World's happiest countries:
http://travel.yahoo.com/ideas/world-s-happiest-places.html?page=all
Denmark: First Place
Finland: Second Place
Norway: Third Place
Netherlands: Fourth Place
Canada: Fifth Place

October 23 2012 at 11:50 PM Report abuse rate up rate down Reply
NIGHTSUB

Baby boomers born between 1946 and 1964.Well there is no future for us.When you have been through this last four years of hell and made money.Great. Hide it.They will get it from you on the next 4 years...

October 23 2012 at 10:12 PM Report abuse rate up rate down Reply
garryangel

What a crock ... 30 something's have the least amount of worry regarding retirement. Age in bonds the rest in good mutual's and they will be set for retirement. IRA's in the least and 401's if available. I had a small business for over 29 years and needed to hold a gun to employees heads to get then to contribute to their account. And, guess what, they were 30 somethings.

October 23 2012 at 9:58 PM Report abuse rate up rate down Reply
brucekareen

It's ironic that while the median net worth of Americans is now said to be $43,698, as a nation we have borrowed about $16-billion. Divided by our population of about 315-million, that's about $50,794 each person.

Folks, as a nation the US is already under-water!

October 23 2012 at 6:01 PM Report abuse +1 rate up rate down Reply
arenadood

I am 62 years old, have been planning for my retirement since I was old enough to work. I listened to my parents and put a small amount away each paycheck. Sometimes as little as one dollar a payday, more if I could. Thru a few smart investments and a simple savings account I am doing ok being retired now. I am far from rich but my Wife and myself can make ends meet and even have some left over each month for entertainment or dinner out when we want. Again, do not wait till it is to late to plan ahead for your own future and do not plan on any outside support when the day comes.

October 23 2012 at 4:55 PM Report abuse rate up rate down Reply
shorthosep

As i've told my kids, whats a 4 letter word that begins with F and ends with K and stands for intercorse. The answer is 401K. If anyone in their 30's thinks that their going to have enough to retire on their CRAZY. This is the scam, says you had $100,000 in a 401K 2008 rolls around and that $100,000 drops to $50,000. Now the finance guys will all tell you that you must keep contributing or your never going to retire.S o you do and now that $50,000 becomes $90,000 but it seems the hammer is about to drop again. Watch as your $90,000 now falls to $45,000. You see the trick is never to take it all at once.If that happens people will stop contributing. This way the fools keep the market going and the fianciers happy. Their still making their millions, are you? I rechecked my own retirement accounts. The money I placed into the stock market over 30 years has gained me about 50%. The money I keep out of stocks and put in a GNMA bond fund gained 600%. Word of advice I know the bond funds are low due to interest rates,but they will eventually recover. Keep most of your money out of the market and find SAFE bond funds. In the end you will be better off. Lesson learned.

October 23 2012 at 4:51 PM Report abuse rate up rate down Reply