While a majority of Americans over age 40 claim to have a well-defined retirement strategy, the same number give themselves a “C” or lower on their retirement savings, according to TD Ameritrade.
Despite planning, the number of Americans who have at least $100,000 saved for retirement doesn’t change significantly until reaching their 60s:
- Ages 40-49: 41%
- Ages 50-59: 46%
- Ages 60-69: 62%
- Ages 70-79: 67%
“Americans don’t ramp up their retirement savings until they reach their 60s—this is where we see the biggest shift in saving attitudes,” Dara Luber, senior manager of retirement at TD Ameritrade, said in a statement. “At the same time, the top retirement advice they’d give to their younger selves would be to start saving and investing earlier in life.”
Things may not always go as planned
The average target age to retire is 67, but only 60% of those in their 40s and 65% of those in their 50s think it’s likely they’ll be able to retire at their desired age.
Sixty-six percent of pre-retirees would retire today if they had the financial means to do so.
The road to retirement can be winding
Americans in their 40s and 50s, as well as those with $250K-plus in investable assets, are especially likely to change course with their retirement plan.
Have changed their retirement savings plan at least once:
- Ages 40-49: 59%
- Ages 50-59: 58%
- Ages 60-69: 37%
- Ages 70-79: 19%
Twenty-five percent of those with $250K-plus in investable assets have changed their retirement plan more than six times.
Career and family events are the most common impetus for Americans to reassess or make changes to their retirement strategy. One in 10 Americans say new political leaders have triggered them to reassess or make changes to their retirement plans.
Nearly half of those in their 40s have already withdrawn from their retirement accounts.
Meanwhile, only one in three Americans 50 and over are taking advantage of catch-up contributions.
The effects of a longer lifespan
With a weakened reliance on Social Security, Americans are also adjusting to living longer, and eight in 10 are shifting their financial strategies to prepare for a potentially longer lifespan.
Most Americans also plan to cut back during retirement in anticipation of longevity.
To prepare for a potentially longer lifespan, three in five plan to reduce their overall expenses during retirement. Those with higher assets are planning to lean on financial advisors and lower retirement withdrawal rates:
Thirty-eight percent with $250K-plus in investable assets plan to get help or are getting help from a financial advisor on a how-to plan during retirement.
Thirty-five percent with $250K-plus in investable assets plan to take less or are taking less out of their retirement accounts during retirement.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
