Americans put off retirement plans due to crisis

Americans put off retirement plans due to crisis

New York: Blame it on the worsening financial turmoil that today Uncle Sam is worried not just for his present but for the future as well, with most Americans deferring their retirement plans at least by a year or so.

However, surprisingly, despite the uncertainty staring in their face, a lot of them are yet to change the way they have been traditionally saving or investing for the future.

A recent Bank of America Retirement Savings Survey showed that about 43% of people in the US are planning to work for more years than they expected a year ago.

“In the light of the recent economic turbulence, many Americans (43%) believe they now face more years in the workforce than they expected to one year ago," said the Bank of America survey, carried out by Braun Research.

According to the survey, which had participation of 1,000 people, over one-third (nearly 36%) of affluent respondents pointed out that the current economic conditions had pushed back their expected retirement age.

Affluent Americans are described as individuals with investable assets between $100,000 and $3 million.

Ironically, despite the ravaging market conditions, more than two-thirds (68%) of respondents have not changed the way they save, invest or manage their retirement assets in the last three months, the survey found.

The worst-affected community would be the “Baby Boomers" or those approaching retirement, who may not have time to recover the financial losses incurred in the recent months.

Going by the survey findings, 62% of the general public and about half (44%) the affluent individuals are either behind the schedule or have not commenced their retirement planning at all.

The survey pointed out that the number of Americans delaying their retirement plans would go up if the economy continues to worsen.

In a clear indication that the economic crisis has threw a spanner in their retirement plans, a survey in March this year had showed that 53% of the general public and 36 % of affluent Americans were either behind schedule or had not started their retirement planning efforts.

“Lack of change in the way people are saving and investing for retirement may indicate that they’re ‘staying the course´, with confidence in their long-term financial plans and investments," Bank of America’s Personal Retirement Solutions Executive Craig Averill said in a statement.

Moreover, the survey revealed that six in 10 Americans (about 60%) have cut down on their spending as compared to their expenditure three months ago.