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Retirement Planning Leads Americans’ Financial Worry List

Most current retirees living comfortably

GALLUP NEWS SERVICE

PRINCETON, NJ -- With half the nation's adults saying they are very or moderately worried about not having enough money for it, retirement presents one of Americans' biggest financial challenges. According to Gallup's annual Economy and Personal Finance survey, conducted April 5-8, the public is more concerned about having enough money for retirement than about any of six other financial issues rated.

The good news is that more than four in five current retirees say they have enough money to live comfortably in their retirement. But whether financial security among seniors will be as widespread in the future is less clear. Only three in five non-retired adults believe they will have enough to live comfortably when they stop working. And having sufficient money in retirement is a significant concern for non-retirees: nearly 6 in 10 say they are worried about it.

Most non-retired Americans expect to receive some Social Security benefits in their retirement, but they are far less likely to say they are counting on Social Security as a major source of income than current retirees are to say they rely on it today. Instead, non-retirees are much more likely to look to personal retirement accounts, such as 401(k)s and Keogh plans to fuel their retirement. Also, income from part-time work and stock investments play a larger role in the expectations of non-retirees than they do in the income of current retirees.

Outlook for Retirement Savings

Overall, 26% of Americans are very worried and 26% are moderately worried about not having enough money for retirement. Another 21% say they are "not too worried," while 23% are not worried at all.

Concern About Having Enough Money for Retirement
April 5-8, 2004

The total percentage very or moderately worried about retirement income exceeds that for paying for medical costs, making housing payments, and making minimum payments on credit cards. Perhaps the 52% who are generally worried about retirement are best contrasted with the 39% who are generally worried about maintaining their current standard of living and the 32% worried about paying their normal monthly bills. Clearly there is a large gap between people's sense of economic security at present and their concern about economic security in their retirement.

Concern About Financial Matters
Percentage who are very or moderately worried
April 5-8, 2004

The percentage who are very or moderately worried about retirement income is only 32% among current retirees, but is 57% among non-retired persons. Within the non-retired population, concern about saving for retirement rises from 44% among 18- to 29-year-olds to 63% among 30- to 49-year-olds and 58% among those 50 and older.

Concern About Having Enough Money for Retirement
Percentage who are very or moderately worried
April 5-8, 2004

Despite this, a separate question finds that 6 in 10 non-retired adults think they will have enough money to live comfortably when they retire. Young adults (those 18-29) are especially confident, with 71% saying they will have enough. Those with fewer years ahead of them to save (adults 30 and older) are less optimistic.

When you retire, do you think you will have enough money to live comfortably, or not?
Percentage who say yes
April 5-8, 2004

Current retirees are generally living quite comfortably -- and in fact report having fewer financial worries than the non-retired population. When asked whether they currently have enough money to live comfortably, 83% of current retirees say they do. This is slightly higher than for non-retired adults, 72% of whom say they currently live comfortably. It is also much higher than the percentage of non-retired adults who expect to be comfortable in retirement (59%),

Sources of Retirement Income

Gallup's Economy and Personal Finance survey asks respondents how much they rely, or expect to rely, on seven different assets or revenue streams in their retirement. For current retirees, Social Security stands out as the leading source that large numbers rely on. More than half of retirees (55%) describe Social Security as a "major source" of their current income, with another 31% calling it a "minor source." Work-sponsored pensions rank second among retirees, rated as a major source by about one-third (34%). Furthermore, more than half of retirees rely on each of these to some degree (as either a major or a minor source of income).

Fewer than half, but still a substantial number of retirees, rely to some degree on income from their home equity, from a 401(k) or other retirement savings account, from other savings accounts and CDs, from stock investments, and from annuities or insurance plans. Between 30% and 47% rate each as either a major or a minor source of income. However, no more than a quarter describe any of these as a major income source.

Relatively few retirees say that money from an inheritance, part-time work, or rent and royalties are major or even minor sources of income for them. The vast majority says it receives no income from any of these.

How much do you rely on each of the following sources of income today -- is it a major source of income, a minor source of income, or not a source at all?

 

Based on Current Retirees
April 2004

 

Major source

Minor source

Not a source

%

%

%

Social Security

55

31

13

A work-sponsored pension plan

34

22

42

The equity you have built up in your home

24

19

50

A 401(k), IRA, Keogh, or other retirement savings account

20

27

50

Other savings such as a regular savings account or CDs

13

34

51

Individual stock or stock mutual fund investments

10

26

62

Annuities or insurance plans

9

21

67

Rent and royalties

4

12

82

Money from an inheritance

3

11

85

Part-time work

2

17

80



The picture is quite different for non-retirees. According to their rating of each item as a "major source" of income, non-retirees are most likely to expect to rely on income from retirement accounts such as 401(k)s, with work-sponsored pensions a distant second, and Social Security ranking third.

When you retire, how much do you expect to rely on each of the following sources of money -- will it be a major source of income, a minor source of income, or not a source at all?

 

Based on Non-Retirees
April 2004

 

Major source

Minor source

Not a source

%

%

%

A 401(k), IRA, Keogh or other retirement savings account

54

28

18

A work-sponsored pension plan

30

32

37

Social Security

25

56

18

The equity you have built up in your home

25

38

34

Individual stock or stock mutual fund investments

20

41

38

Other savings such as a regular savings account or CDs

17

52

30

Part-time work

17

50

32

Annuities or insurance plans

8

34

57

Money from an inheritance

8

31

60

Rent and royalties

5

25

69



The following table aligns the current income sources of retirees with the income expectations of non-retirees. Here it is clear that current retirees have a far greater reliance on Social Security and pensions than future retirees expect to have. Offsetting this, non-retirees have significantly higher expectations about income from self-directed retirement accounts, such as 401(k)s, IRAs, or Keogh plans, than is the reality for current retirees. Non-retirees also have slightly higher expectations for part-time work and stock investments.

 

Retirement Income Sources Comparison -- % "Major Source"
April 2004

 

Retired

Non-retired

Difference

%

%

in pct. pts.

Social Security

55

25

30

A work-sponsored pension plan

34

30

4

Annuities or insurance plans

9

8

1

Rent and royalties

4

5

-1

The equity you have built up in your home

24

25

-1

Other savings such as a regular savings account or CDs

13

17

-4

Money from an inheritance

3

8

-5

Individual stock or stock mutual fund investments

10

20

-10

Part-time work

2

17

-15

A 401(k), IRA, Keogh, or other retirement savings account

20

54

-34



However, when factoring in the percentage rating each as a "minor source" of income, similar proportions of non-retirees and retirees expect to receive Social Security in retirement. Although part-time work is not a substantial source of income or expected income from either group, it is notable that two-thirds of non-retired persons expect to receive some income this way, versus fewer than one in five current retirees.

 

Retirement Income Sources Comparison -- % "Major Source" + % "Minor Source"
April 2004

 

Retired

Non-retired

%

%

Social Security

86

81

A work-sponsored pension plan

56

62

A 401(k), IRA, Keogh, or other retirement savings account

47

82

Other savings such as a regular savings account or CDs

47

69

The equity you have built up in your home

43

63

Individual stock or stock mutual fund investments

36

61

Annuities or insurance plans

30

42

Part-time work

19

67

Rent and royalties

16

30

Money from an inheritance

14

39



Retirement Age

Americans' expectations about their retirement ages appear to be changing, as non-retirees generally see themselves working longer than current retirees actually worked. Half of all non-retirees (52%) believe they will retire at age 65 or beyond; only 26% of current retirees waited until age 65 to retire. Similarly, only 20% of non-retirees expect to stop working before they turn 60, while 35% of current retirees say they did retire before 60.

The net result of these differences is that there is a four-year gap between the average age that retirees stopped working (60) and the average age that non-retired adults say they expect to retire (64).

 

Retirement Age Comparison
April 2004

 

Under
55


55-59


60-64


65

Over
65


Mean

Retirees -- actual age retired

17

18

37

14

12

60

Non-retirees -- expected retirement age

9

11

21

26

26

64



Survey Methods

These results are based on telephone interviews with a randomly selected national sample of 1,014 adults, aged 18 and older, conducted April 5-8, 2004. For results based on this sample, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±3 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

23. Next, please tell me how concerned you are right now about each of the following financial matters, based on your current financial situation -- are you very worried, moderately worried, not too worried, or not worried at all. If a particular item does not apply to you, please say so. First, how worried are you about … How about-- [RANDOM ORDER]?

A. Not being able to pay medical costs for normal health care

 


Very
worried

Mod-erately worried


Not too worried

Not worried
at all

DOESN'T APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2004 Apr 5-8

21

16

24

36

3

*

2003 Apr 7-9

17

20

24

36

3

*

2002 Apr 8-11

18

17

26

36

2

1

2001 Apr 6-8

22

22

24

31

1

0



B. Not being able to pay medical costs in the event of a serious illness or accident

 


Very
worried

Mod-erately worried


Not too worried

Not worried
at all

DOESN'T APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2004 Apr 5-8

26

21

24

27

2

*

2003 Apr 7-9

24

22

23

29

2

--

2002 Apr 8-11

21

24

25

28

1

1

2001 Apr 6-8

27

23

24

25

1

*



C. Not being able to pay your rent, mortgage or other housing costs

 


Very
worried

Mod-erately worried


Not too worried

Not worried
at all

DOESN'T APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2004 Apr 5-8

11

13

26

42

7

1

2003 Apr 7-9

11

14

27

43

5

*

2002 Apr 8-11

8

14

26

47

4

1

2001 Apr 6-8

10

14

28

44

4

*



D. Not being able to maintain the standard of living you enjoy

 


Very
worried

Mod-erately worried


Not too worried

Not worried
at all

DOESN'T APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2004 Apr 5-8

16

23

29

31

1

*

2003 Apr 7-9

14

24

32

29

1

*

2002 Apr 8-11

12

23

31

32

1

1

2001 Apr 6-8

16

27

30

26

1

*



E. Not being able to make the minimum payments on your credit cards

 


Very
worried

Mod-erately worried


Not too worried

Not worried
at all

DOESN'T APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2004 Apr 5-8

7

10

22

46

15

*

2003 Apr 7-9

7

9

21

47

16

*

2002 Apr 8-11

7

8

21

48

15

1

2001 Apr 6-8

9

9

22

41

19

*



F. Not having enough money for retirement

 


Very
worried

Mod-erately worried


Not too worried

Not worried
at all

DOESN'T APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2004 Apr 5-8

26

26

21

23

4

*

2003 Apr 7-9

24

30

22

20

4

*

2002 Apr 8-11

25

29

19

22

4

1

2001 Apr 6-8

24

29

24

19

4

*



G. Not having enough to pay your normal monthly bills

 


Very
worried

Mod-erately worried


Not too worried

Not worried
at all

DOESN'T APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2004 Apr 5-8

12

20

28

39

1

*

2003 Apr 7-9

12

18

29

40

1

*

2002 Apr 8-11

11

19

27

42

1

*

2001 Apr 6-8

12

20

29

39

*

*

* Less than 0.5%

(vol.) Volunteered response



SUMMARY TABLE: ECONOMIC CONCERNS

TREND IN VERY+MODERATELY WORRIED

 

Having enough for retire-
ment

Paying costs for ser-
ious
ill-
ness
or
acci-
dent

Main-
tain-
ing
your stan-
dard
of liv-
ing

Paying medi-
cal
costs for normal health-care

Pay-
ing
nor-
mal month-
ly
bills

Pay-
ing
rent, mort-
gage,
or
other hou-
sing
costs

Mak-
ing
min-
imum pay-
ments
on
cre-
dit
cards

%

%

%

%

%

%

%

2004 Apr 5-8

52

47

39

37

32

24

17

2003 Apr 7-9

54

46

38

37

30

25

16

2002 Apr 8-11

54

45

35

35

30

22

15

2001 Apr 6-8

53

50

43

44

32

24

18



28. When you retire, do you think you will have enough money to live comfortably, or not?

BASED ON -- 758 -- NON-RETIRED ADULTS

 

Yes

No

No opinion

%

%

%

2004 Apr 5-8

59

35

6

2003 Apr 7-9

59

36

5

2002 Apr 8-11

59

32

9



29. When you retire, how much do you expect to rely on each of the following sources of money -- will it be a major source of income, a minor source of income, or not a source at all? How about -- [READ A-J IN ORDER]?

BASED ON -- 758 -- NON-RETIRED ADULTS

A. Social Security

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

25

56

18

1

2003 Apr 7-9

29

57

12

2

2002 Apr 8-11

27

56

15

2

2001 Apr 6-8

28

57

14

1



B. A 401(k), IRA, Keogh, or other retirement savings account

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

54

28

18

*

2003 Apr 7-9

47

34

17

2

2002 Apr 8-11

53

28

16

3

2001 Apr 6-8

58

26

15

1

* Less than 0.5%



C. Individual stock or stock mutual fund investments

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

20

41

38

1

2003 Apr 7-9

20

42

36

2

2002 Apr 8-11

23

43

32

2

2001 Apr 6-8

24

39

36

1



D. Money from an inheritance

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

8

31

60

1

2003 Apr 7-9

7

31

60

2

2002 Apr 8-11

10

28

60

2

2001 Apr 6-8

7

29

63

1



E. Other savings such as a regular savings account or CDs

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

17

52

30

1

2003 Apr 7-9

19

52

27

2

2002 Apr 8-11

23

50

25

2

2001 Apr 6-8

16

51

32

1



F. A work-sponsored pension plan

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

30

32

37

1

2003 Apr 7-9

28

32

39

1

2002 Apr 8-11

29

33

36

2

2001 Apr 6-8

34

28

37

1



G. Rent and royalties

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

5

25

69

1

2003 Apr 7-9

5

27

66

2

2002 Apr 8-11

8

29

60

3

2001 Apr 6-8

5

22

72

1



H. Annuities or insurance plans

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

8

34

57

1

2003 Apr 7-9

10

36

53

1

2002 Apr 8-11

7

40

51

2

2001 Apr 6-8

7

34

58

1



I. Part-time work

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

17

50

32

1

2003 Apr 7-9

13

57

29

1

2002 Apr 8-11

16

51

31

2

2001 Apr 6-8

10

52

36

2



J. The equity you have built up in your home

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

25

38

34

3

2003 Apr 7-9

25

42

30

3

2002 Apr 8-11

24

40

33

3



SUMMARY TABLE: EXPECTED RETIREMENT INCOME SOURCES

 

2004 Apr 5-8
(sorted by "major source")

Major source

Minor source

Not a source

%

%

%

A 401(k), IRA, Keogh or other retirement savings account

54

28

18

A work sponsored pension plan

30

32

37

Social Security

25

56

18

The equity you have built up in your home

25

38

34

Individual stock or stock mutual fund investments

20

41

38

Other savings such as a regular savings account or CDs

17

52

30

Part-time work

17

50

32

Annuities or insurance plans

8

34

57

Money from an inheritance

8

31

60

Rent and royalties

5

25

69



30. At what age do you expect to retire?

BASED ON -- 758 -- NON-RETIRED ADULTS

 

Under 55


55-59


60-64


65

Over
65

Never retire

No opinion


Mean

%

%

%

%

%

%

%

%

2004 Apr 5-8

9

11

21

26

26

--

7

64

2003 Apr 7-9

8

11

23

28

22

--

8

63

2002 Apr 8-11

7

15

21

26

21

--

10

63

1995 Dec 15-18

15

12

23

29

15

5

4

60

1995 Nov 6-8

16

11

20

34

12

3

4

60



31. How much do you rely on each of the following sources of income today -- is it a major source of income, a minor source of income, or not a source at all? How about -- [READ A-J IN ORDER]?

BASED ON -- 256 -- RETIRED ADULTS

A. Social Security

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

55

31

13

1

2003 Apr 7-9

50

35

13

2

2002 Apr 8-11

58

22

18

2



B. A 401(k), IRA, Keogh, or other retirement savings account

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

20

27

50

3

2003 Apr 7-9

20

26

51

3

2002 Apr 8-11

19

23

56

2



C. Individual stock or stock mutual fund investments

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

10

26

62

2

2003 Apr 7-9

12

27

57

4

2002 Apr 8-11

15

31

52

2



D. Money from an inheritance

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

3

11

85

1

2003 Apr 7-9

4

11

82

3

2002 Apr 8-11

4

11

84

1



E. Other savings such as a regular savings account or CDs

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

13

34

51

2

2003 Apr 7-9

14

39

46

1

2002 Apr 8-11

15

33

51

1



F. A work-sponsored pension plan

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

34

22

42

2

2003 Apr 7-9

41

14

44

1

2002 Apr 8-11

29

16

51

4



G. Rent and royalties

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

4

12

82

2

2003 Apr 7-9

5

17

76

2

2002 Apr 8-11

6

13

80

1



H. Annuities or insurance plans

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

9

21

67

3

2003 Apr 7-9

6

23

69

2

2002 Apr 8-11

8

21

69

2



I. Part-time work

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

2

17

80

1

2003 Apr 7-9

1

18

80

1

2002 Apr 8-11

3

14

82

1



J. The equity you have built up in your home

 

Major source

Minor source

Not a source

No opinion

%

%

%

%

2004 Apr 5-8

24

19

50

7

2003 Apr 7-9

25

15

55

5

2002 Apr 8-11

18

14

60

8



SUMMARY TABLE: RETIREMENT INCOME SOURCES

 

2004 Apr 5-8
(sorted by "major source")

Major source

Minor source

Not a source

%

%

%

Social Security

55

31

13

A work-sponsored pension plan

34

22

42

The equity you have built up in your home

24

19

50

A 401(k), IRA, Keogh, or other retirement savings account

20

27

50

Other savings such as a regular savings account or CDs

13

34

51

Individual stock or stock mutual fund investments

10

26

62

Annuities or insurance plans

9

21

67

Rent and royalties

4

12

82

Money from an inheritance

3

11

85

Part-time work

2

17

80



32. At what age did you retire?

BASED ON -- 256 -- RETIRED ADULTS

 

Under
55


55-59


60-64


65

Over
65

No opinion


Mean

%

%

%

%

%

%

%

2004 Apr 5-8

17

18

37

14

12

2

60

2003 Apr 7-9

21

14

34

12

15

4

59

2002 Apr 8-11

19

19

34

13

11

4

59

1993 Apr

27

18

25

14

11

5

57

1992 Apr

21

16

36

13

8

6

58

1991 Apr

28

12

36

11

7

6

57



Gallup


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