Americans concerned about retirement but do nothing

So when we are concerned and worried, what do Americans do? They go party or tune in to see what Michael Jackson is up to. But should we not be dealing with the issue instead and figure out a solution? Well, it is hard to do so, particularly when it comes to saving and planning for retirement. (Related article: Retirement planning tips for baby boomers)

According to a survey by the National Association for Variable Annuities (NAVA), hold your breath, as many as 95% of Americans have financial concerns about retirement. The rest 4% were probably drinking beer while watching Michael Jackson trial and the remaining 1% probably includes George Bush, Dick Cheney, Bill Gates, and Donald Trump.

The only good news is that Americans have overwhelmingly rejected private retirement accounts and Social Security privatization initiatives because both of them in their current form will literally drive Americans into poverty.

Retirement Income-Related Fears First with Future Retirees

Future retirees worry most about retirement income-related issues. In previous surveys, Americans have clearly shown preference for stable retirement income over wealth, and no matter how noble the idea of an ownership society appears to be, Americans want a guaranteed (even if small) retirement income. The financial fear weighing heaviest on the minds of those ages 18-34 is the premature depletion of retirement savings. Possibly reeling from the recent bear market and contemplating the possible changes in the Social Security system, 24 percent of respondents in this age group are afraid that their retirement assets will not last their lifetime. It seems that young Americans have recently come to know of the horrors of private retirement accounts because just a couple of weeks ago they were its more enthusiastic supporters.

Moreover, an uncertain job market makes for an uncertain future. Part-time workers across all age groups show a heightened concern for running out of money during retirement, almost 40 percent more than the full-time workers surveyed. With companies not adding many jobs in the US and instead offshoring jobs overseas, Americans have enough reasons to be concerned about old age. (Related article: Poor saving habits hurt Americans during retirement)

In addition, middle age Americans with full-time jobs worry about their retirement lifestyles. Thirty-seven percent of Americans aged 35-54 rank the inability to maintain their current standard of living as one of their top two retirement fears. (Related article: Even millionaires worry about retirement income)

Greatest Fear Among Educated Americans: High Healthcare Costs

While the study revealed that a majority of Americans are concerned about high healthcare costs, the greatest level of anxiety in this regard is found among retired Americans with at least some level of college education. Respondents least worried about healthcare costs are between the ages of 18-34, have only a high school diploma, and are employed in part-time jobs. That is not because these Americans have healthcare; actually almost 35 million Americans have no coverage (the highest in any developed country and definitely an embarrassment for the richest country in the world). The reason is that since they have never had any coverage they just don't even realize that it is an issue.

Social Security Anxiety Ranks Low

Despite the increased attention surrounding Social Security reform, only 16 percent of respondents are worried about their future Social Security payments. Americans seem to understand that Social Security payments will not completely cover their retirement costs since the study shows that they realize the need for other sources of guaranteed income to help cover retirement expenses. So the propaganda by President Bush has clearly helped in lowering expectations of Americans and that was part of the strategy - create a false sense of crisis and then destroy Social Security as Americans have known it. No wonder AARP is horrified.

Inflation Comes in Last

Only nine percent of respondents were concerned that inflation could negatively impact their retirement savings. The study shows that respondents across all age groups and demographics are less worried about inflation eroding the value of their retirement assets than they are about other issues. Given the relatively low inflation rates in recent years, this lack of concern is not surprising. What if this survey was conducted not in January but in March 2005? With record gas prices, the answer would have been totally different.

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Source: NAVA