By Richard Morin
By Richard Morin
Here's some advice for young adults: Start saving for retirement, right now. And forget most of what you think you know about old age. You're probably wrong, and these misperceptions may blind you to the real problems and possibilities of life after work.
Those cautions emerge clearly from a new national survey of 2,006 randomly conducted by Princeton Survey Research for Americans Discuss Social Security, a project supported by the Pew Charitable Trusts.
The survey reveals that young and middle-aged adults are too optimistic about what life will be like in some ways when they retire. At the same time, younger Americans are far too pessimistic about other aspects of old age reality gaps that emerged when researchers asked retirees about their actual experiences in retirement, then asked young and middle-aged respondents what they expected retired life to be like.
"Generation X and the Baby Boom Generation have expectations about aging and retirement that are markedly different than the experiences of older Americans today," analysts for Princeton Research Associates reported in a detailed summary of the poll results. "Young and middle-aged people think they will work later in life, work more during retirement, and be more involved in activities like volunteer work, hobbies, travel and learning new skills."
Half of all adults under the age of 50 say retirement is "a chance for a new beginning in life" a view shared by only a third of all retirees interviewed in the survey. Likewise, half of all young and middle-aged Americans say they expect to retire before the age of 65 and work part-time in retirement; seven in 10 retirees say they had already retired by that age and few say paid work is part of their lives.
But younger Americans are not consistently over-optimistic. Researchers found that younger Americans express an unrealistically pessimistic view of the health problems they will face in old age and believe that the traditional problems of old age set in much earlier than they actually do.
"While young and middle-aged people believe their current health habits will help them live a healthy life in old age, they worry that the stress in their lives now will ultimately takes its toll," the researchers wrote. "They believe 'old age' begins by the time a person reaches 65, but the image of old age they describe for themselves with multiple physical, social and emotional problems is more like the life described by survey respondents in their eighties and nineties than by respondents in their seventies." That pessimism is more broadly shared by African Americans and Hispanics than by whites.
The survey also found that younger Americans "think they will live well during retirement, even as they believe the Social Security program will do little, if anything, to help them." Only half of those under the age of 50 expect to benefit from Social Security when they reach old age.
Those views carry profound and contradictory implications for the emerging debate over Social Security. At first glance, they suggest the public, including younger Americans, is clearly aware that Social Security is in trouble. But the broad belief that Social Security won't be there when younger Americans reach retirement age also creates openings for those who would replace Social Security with some kind of privatized system and other options once thought unthinkable.
The survey suggests that Americans of all ages are now taking responsibility for helping to finance their lives after work. The survey revealed that two-thirds of all Americans who have not yet retired have started to save for retirement. Even younger people are putting something away for their old age: 44 percent of those aged 18 to 24 reported that they've already started to save for retirement, not surprising since it is this age group that is the most pessimistic about the future of Social Security. Among those 25 to 34, six in 10 said they're saving for retirement. So are 74 percent of those 35 and older who aren't yet retired.
Not everyone can save money for retirement. People with incomes under $40,000 per year, especially blacks and Hispanics, are having trouble saving, researchers found. And people from the baby boom generation who haven't been able to save yet are particularly worried about retirement. "They do not share the upbeat attitudes of their contemporaries who have been saving."
Researchers found that saving is smart. Current retirees who managed to save money before they left work report they are living dramatically better than those who depend on Social Security, a pension or help from their children to make it through retirement.
"Retirement savings are crucial.... The financial circumstances and quality of life of today's retirees are qualitatively different for those who depend on Social Security vs. those who have some savings in addition."
According to the survey, most retired people with savings rate their financial situation as either excellent or good, but those with no savings say their situation is only fair, or poor. Three in four savers report they had money left over after expenses each month, more than twice the percentage of those who didn't retire with a nest egg. And non-savers were twice as likely as savers to say it was hard for them to live in reasonable comfort in retirement.
Money in the bank also may help keep you stay young, researchers found. Two out of three retirees with savings, but only half of those with no savings, said they feel "younger than their age." And by a 3-1 margin, they agreed that retirement is a "chance for a new beginning."
Richard Morin is director of polling for The Washington Post. "What Americans Think" appears Mondays in The Washington Post National Weekly Edition. Morin can be reached at email@example.com.
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