Living cost rise squeezes U.S. retirement savings
BOSTON, May 11 (Reuters) – As Americans paid more to drive in the last six months, three out of four said higher living costs prevented them from saving more for retirement, according to a new study released on Thursday.
Americans already face gloomy retirement prospects, with 83 percent acknowledging they don’t save enough, as experts calculate most people will have to get by on 43 percent less money when they stop working full time.
Now, with gasoline prices hovering above $3 a gallon, many people face an even tougher struggle, Fidelity Investments, which conducts the survey twice a year, said.
The Fidelity Retirement Index, which analyzes American households’ overall retirement readiness, found that among Americans whose savings plans were pinched by higher living costs, nearly one in two had to cut the amount they regularly save for retirement.
And nearly one in four said they had to delay starting to save for retirement.
Americans are acutely aware of their situation with 83 percent now saying they are not saving enough, up from 78 percent in the fall of 2005, when the last survey was conducted.
Three out of four working Americans said they do not have a detailed, formal retirement plan that spells out how much they need to save to live comfortably in their golden years.
But Fidelity also said that roughly half of all Americans polled tried to do something to improve their situation in the last six months.