Despite all the dire warnings from financial advisers, relatives and the federal government, most Americans still aren't saving anywhere near enough money to afford the dignified retirement they all claim is so important to them and, worse, most don't even have any idea exactly how much they'll need even if they were to begin saving today for their golden years.

That's the sobering truth derived from the 21st installment of the Employee Benefit Research Institute's Retirement Confidence Survey.

The only good news, according to Jack VanDerhei, research director of the Washington-based EBRI, is that the majority of Americans are rightfully ignoring short-term economic improvements in the stock market and unemployment rates following several years of dismal performance and now recognize that they are woefully behind the eight-ball in terms of properly planning and saving for their eventual retirement.

"There are many big, systemic factors redefining retirement in America today," VanDerhei said during a conference call with reporters. "People are starting to wake up to this reality and changing their expectation of retirement. Unfortunately, the survey doesn't find any evidence that people are changing their behavior-at least not yet."

The Retirement Confidence Survey, conducted by market research firm Mathew Greenwald & Associates, found that more than half of the 1,260 respondents surveyed in January are "not at all confident" or "not too confident" that they'll be able to afford the retirement they want, the lowest level of confidence among workers in the survey's 21-year history.

One of the main reasons so many people are so pessimistic about their retirement prospects is the simple fact that far too few workers are actually saving for a retirement. Currently, most Americans can expect an average retirement of about 20 years, and that number continues to expand as people live longer while at the same time they incur higher medical and cost-of-living expenses.

The survey found that the folks most petrified about retirement and essentially resigned to the fact that they'll either work throughout most of their retirement or never really experience one at all are those with savings of less than $25,000 already in the bank.

Forty-three percent of respondents with savings of less than $25,000 said they are not confident they'll have enough money to afford a decent retirement, up from 19% in 2007. Meanwhile, 22 percent of those with between $25,000 and $100,000 in savings remained less-than-confident about their retirements, more than triple the 7% who felt the same way in 2007.

This changing perception reflects not only most Americans disinterest in saving for tomorrow but also the stark reality that most people aren't expecting things to magically improve between now and the time they hit retirement age.

"Sixty-two percent of workers said they can save more than they're saving now," Greenwald said. "Most said they could dine out less, cut back on entertainment and, in some cases, wouldn't really need to cut back at all to increase their savings. And while the sacrifices wouldn't be that great, many still haven't formed the habit of doing it."

For financial advisers, the fact that only 42% of those surveyed said either they or their spouse had tried to calculate how much money they'll need for retirement is both a curse and an opportunity. That so few have taken the time to reasonably figure out how much they'll need to take that cruise to Alaska or keep them in prescription medications for 25 years or more speaks to just how invaluable retirement planning advice will be to this growing population of skeptical, unprepared workers. However, since so few are on a steady path for retirement, they undoubtedly have little saved and are a challenge.

According to the U.S. Census, the number of people age 65 and older will increase 79% between now and 2030-an additional 75 million potential new clients. However, only a small sliver of the adviser community-roughly 5,000 to 6,000 advisors-is specializing in retirement income clients.

Perhaps most depressing, the survey found that the percentage of workers who expect to retire after age 65 continues to increase, growing from 11% in 1991 and 20% in 2001 to 36% in 2011.

Also, 74% of workers said they expect to have to work for pay in retirement, more than triple the number (23%) of current retirees who are now working because they need the income.

"Even those who have achieved the highest levels of accumulation already, with more than $100,000 in savings, won't be able to maintain the lifestyle they're currently enjoying in retirement," Greenwald said. "High accumulators still haven't come to that reality. And 70% of all workers say they're behind schedule when it comes to saving for retirement."

"The bigger problem is that most haven't changed their behavior and turned this pessimism into action to catch up," he said.

Meanwhile, a Country Financial survey of 3,000 adults also found that Americans are not very confident at all that they will be able to retire.

Only 28% think it is possible for a middle-income family to save for a secure retirement, down from 30% in 2010 and 37% in 2007.

Forty-three percent have little faith in their current retirement savings plans, and the same number have decreased the amount that they are saving. Nonetheless, 50% do not expect to delay retirement, which could be unrealistic if they are not well-prepared for their golden years.


Larry Barrett is a contributor to Financial Planning.

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