By Mac McLean

The Bulletin

Paying for retirement

A recent survey from the Federal Reserve System’s board of directors asked 3,051 Americans how they planned to pay their expenses when they retired. Here is what they said:

• Social Security, 44.6 percent

• 401(k), 39.7 percent

• Brokerage or savings account, 23.4 percent

• Continue working, 23.5 percent

• Individual Retirement Account, 22.1 percent

• Defined benefit pension, 18.5 percent

• Spouse or partner will continue working, 8.8 percent

• Income from the sale of real estate, 8.3 percent

• Income from the sale of a business, 3.9 percent

• Rely on their children, grandchildren or other family members, 2.8 percent

A recent survey conducted by Federal Reserve System’s board of directors found that only one-fourth of Americans plan to stop working once they’ve reached their chosen retirement age.

According to the survey, which was released last month, 3.8 percent of Americans who have thought about their retirement plan to take up another full-time job once they retire from their current full-time job; 15.8 percent plan to take up a part-time job; and 9.9 percent plan to start working for themselves.

The survey found 21.3 percent plan to keep working as long as possible and 6.2 percent do not plan to retire at all. It also found that the older someone gets, the more likely he was to think about working as part of their retirement.

“From this survey alone,” reads the analysis of the survey’s results, “it is not possible to know whether these differences reflect a change in desired outcome over time, an increased understanding of the financial challenges of full retirement or simply intergenerational differences in attitude about retirement.”

But what is certain, according to the survey, is that very few Americans have given a considerable amount of thought toward their future retirements. Even fewer have been able to save enough so they’ll be able to live comfortably if they choose to stop working at all.


Conducted as part of its Report on the Economic Well-Being of U.S. Households in 2013, the Federal Reserve’s retirement survey found that 27.1 percent of Americans have given “a fair amount” or “a lot” of thought about their retirement plans.

Generally speaking, the survey found that the younger a person was, the less thought he had given about his retirement plans. It found 40.7 percent of people who were between age 18 and 29 had given no thought toward their retirement and 27.3 percent had given it “a little” thought.

The survey found these numbers dropped considerably the older a person got — only 20.7 percent of people between age 30 and 44 and 18.6 percent of those age 45 to 59 gave their retirements no thought at all — but that a lack of preparedness was almost universal regardless of how old a person was.

“Even those closer to traditional retirement ages show only a modest level of retirement planning,” reads the survey, which found 19 percent of people 60 or older had given “a little” thought toward their retirements and 19.7 percent of the people in this age group had given it no thought at all.


Raising another red flag, the survey found 30.9 percent of the population as a whole does not have a pension plan, 401(k) plan or another type of retirement savings account. These people could end up seeing Social Security — which pays its average beneficiary $1,300 a month, according to the Social Security Administration — as their only source of income when they retire.

“Even among those ages 60 and over the percentage with no retirement savings is striking,” reads the report, which found 31 percent of the people in this oldest age group haven’t saved toward their retirement.

The survey also found that even if a person had set away money for retirement, that money wasn’t necessarily deemed “untouchable” and had been drawn upon in the form of loans or early withdrawals to pay current expenses.

It found 7 percent of the people who had established some sort of retirement savings have taken a loan against the balance of their accounts in the past 12 months so they could cover their expenses. Another 5 percent of the people who have a retirement savings account cashed a portion of its balance early to pay their expenses.

Financial planners frown on both of these practices because they not only put people at risk of paying steep penalties or fees, but also reduce the amount of principal in a retirement savings account and thus the amount of interest or investment income it earns over time.

— Reporter: 541-617-7816,