PRINCETON, NJ -- Non-retired Americans' expectations for the financial resources they will draw on to fund their retirement have changed since 2007. Most notably, more expect to rely heavily on Social Security and fewer expect 401(k)s or IRAs, home equity, and pension plans to be major funding sources.
Overall, non-retirees still most commonly say IRAs and 401(k)s will be a major source of retirement income (45%), followed by Social Security (34%), work-sponsored pension plans (23%), saving accounts or CDs (22%), home equity (20%), and individual stock investments (20%).
The 34% of non-retirees who say Social Security will be a major source of income in their retirement is the highest Gallup has measured since 2001, the first year the annual Gallup Economy and Personal Finance survey was conducted. Prior to 2008, between 25% and 29% of non-retired Americans expected Social Security to be a major source of retirement funding, but that number has been at or above 30% in each of the last three years.
That change coincides with declining stock and home values during the recent economic slump.
The current survey also marks new lows in the percentage of non-retirees saying home equity (20%) and pension plans (23%) will be major sources of their retirement income. Last year's survey marked the low point (42%) in the expectation that 401(k)s or IRAs would be a major source of funding; the number is somewhat better this year (45%) as the stock market is up compared with a year ago.
The drop since 2007 in the percentage of non-retirees expecting to rely on pension plans is partly a result of the longer-term trend of fewer companies offering pensions at all. However, it also reflects some private- and public-sector employers' more recent efforts to trim the size of pensions that future or current retirees receive.
As Gallup has reported, non-retirees' expectations for funding their retirement differ from current retirees' experience. Among those who are retired, Social Security is easily the most common source of funds, with 54% saying it is a major source of income. Pension plans are the next most common at 37%, followed by 401(k)s and IRAs (22%), and home equity (20%).
Results are based on telephone interviews with 1,020 national adults, aged 18 and older, conducted April 8-11, 2010. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.
For results based on the sample of 666 non-retirees, the maximum margin of sampling error is ±4 percentage points.
For results based on the sample of 354 retirees, the maximum margin of sampling error is ±6 percentage points.
Interviews are conducted with respondents on landline telephones (for respondents with a landline telephone) and cellular phones (for respondents who are cell phone only).
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.