One Out of Five U.S. Adults Have Not Taken Steps to Plan for Their Retirement

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ROCHESTER, N.Y. — February 20, 2007 — A new Wall Street Journal Online/Harris Interactive Personal Finance Poll found that while 90 percent of U.S. adults say they plan to retire, more than one in five (22%) have not yet taken any steps to plan for this event. Among single households, this figure rises, with 41 percent of respondents yet to begin planning for retirement. In fact, 10 percent of respondents in this poll say they do not plan to retire at all.
These are just some of the results of an online survey of 4,037 U.S. adults conducted by Harris Interactive® from January 8 to 10, 2007 for The Wall Street Journal Online.
Planning for retirement starts earlier and is more creative
While the mean age for beginning retirement planning is 33.3 years old, young people say they are planning for retirement earlier. The median age at which 18- to 34-year-olds begin planning is 23.6; for 35- to 44-year-olds it jumps to 29.1; for ages 45-54 it is 35.6; and for those ages 55 and older, the median is 42.8.
Among the steps taken by those who plan to retire, 29 percent say they are contributing to an employer-sponsored account such as a 401(k), 21 percent have opened a separate retirement savings account or a Roth IRA, and 20 percent are investing in taxable stocks, bonds, mutual funds or annuities. Only 10 percent say they have worked with a financial adviser or other professional to develop a retirement plan. Respondents in the 45 to 54 age group are the most active with the things they are doing to prepare for retirement. Of all the age groups, they are most likely to be working with an advisor (15%) and planning the type of work they’ll do when they retire (18%).
According to Natalie Jobity, Vice President of Financial Services at Harris Interactive, “These results are consistent with other research we have done on consumer retirement planning. People simply are not taking retirement planning as seriously as they should and quite a significant proportion still think that Social Security will be there as an income source when they retire. This is why getting advice from a financial professional is so important yet so few are tapping into that resource.”
Information and knowledge seem to inspire planning for retirement
Respondents with a college degree and those with the highest incomes are most active in retirement preparation. Seventy percent of college graduates and 75 percent of respondents with income over $75K have begun planning, compared to 50 percent of the total population. Furthermore, college graduates and income earners of over $75K are also twice as likely to be working with a financial planner on retirement needs (20% each vs. 10% of the total population).
Conversely, respondents with just a high school education or less are least likely to have started planning for retirement, with only 35% of respondents doing so (compared to 50% for the total population). This group is also most likely to claim they do not intend to retire (16% vs. 10% of the total population), which may explain why they have not begun planning for retirement. Additionally, one-third (33%) of respondents who make under $35K have not started to plan for retirement.
TABLE 1A
RETIREMENT PLANNING PROCESSES — BY AGE
“Which of the following, if any, are you doing as part of your retirement planning?”
Base: All Respondents

Total 18-34 35-44 45-54 55 and over
N=4037 N=1021 N=660 N=949 N=1407
% % % % %
Plan To Retire (Net)
90
85
89
91
94
Planning For Retirement (Sub-Net) 50 41 64 69 38
Contributing to an employer-sponsored retirement account, such as a 401(k) 29 25 45 40 17
Opening a separate retirement savings account and/or a Roth IRA 21 16 25 31 15
Investing in taxable stocks, bonds, mutual funds or annuities 20 15 21 28 17
Planning the type of work I’ll do in retirement 11 6 9 18 11
Working with a financial advisor or similar professional to develop a retirement plan 10 6 9 15 12
Getting insurance to cover long-term health care costs 8 6 9 11 7
Other 8 4 8 12 7
I have not started retirement planning. 22 45 22 17 5
I have already retired and had planned for retirement. 18 0 2 6 51
I do not plan to retire.
10
15
11
9
6

Note: Multiple-response question


TABLE 1B
RETIREMENT PLANNING PROCESSES — BY MARITAL STATUS
“Which of the following, if any, are you doing as part of your retirement planning?”
Base: All Respondents

Total Married Single/
Never
Married
Div./
Sep./
Wid.
N=4037 N=2122 N=938 N=734
% % % %
Plan To Retire (Net)
90
93
85
90
Planning For Retirement (Sub-Net) 50 59 40 39
Contributing to an employer-sponsored retirement account, such as a 401(k) 29 36 24 19
Opening a separate retirement savings account and/or a Roth IRA 21 25 16 14
Investing in taxable stocks, bonds, mutual funds or annuities 20 26 12 13
Planning the type of work I’ll do in retirement 11 12 9 10
Working with a financial advisor or similar professional to develop a retirement plan 10 13 6 7
Getting insurance to cover long-term health care costs 8 8 9 6
Other 8 8 5 9
I have not started retirement planning. 22 13 41 18
I have already retired and had planned for retirement. 18 21 4 33
I do not plan to retire.
10
7
15
10

Note: Multiple-response question
TABLE 1C
RETIREMENT PLANNING PROCESSES — BY EDUCATION
“Which of the following, if any, are you doing as part of your retirement planning?”
Base: All Respondents

Total H.S.
or
Less
Some
Col.
Col.
Grad+
N=4037 N=620 N=1664 N=1753
% % % %
Plan To Retire (Net)
90
84
93
96
Planning For Retirement (Sub-Net) 50 35 54 70
Contributing to an employer-sponsored retirement account, such as a 401(k) 29 18 31 45
Opening a separate retirement savings account and/or a Roth IRA 21 10 22 34
Investing in taxable stocks, bonds, mutual funds or annuities 20 10 19 34
Planning the type of work I’ll do in retirement 11 6 13 17
Working with a financial advisor or similar professional to develop a retirement plan 10 5 9 20
Getting insurance to cover long-term health care costs 8 3 10 13
Other 8 8 8 7
I have not started retirement planning. 22 30 22 8
I have already retired and had planned for retirement. 18 20 17 17
I do not plan to retire.
10
16
7
4

TABLE 1D
RETIREMENT PLANNING PROCESSES — BY INCOME
“Which of the following, if any, are you doing as part of your retirement planning?”
Base: All Respondents

Total Less
Than
$35K
$35K

$49.9K
$50K

$74.9K
$75K and over
N=4037 N=1053 N=576 N=816 N=891
% % % % %
Plan To Retire (Net)
90
83
95
94
95
Planning For Retirement (Sub-Net) 50 29 47 58 75
Contributing to an employer-sponsored retirement account, such as a 401(k) 29 10 27 40 49
Opening a separate retirement savings account and/or a Roth IRA 21 8 19 20 37
Investing in taxable stocks, bonds, mutual funds or annuities 20 7 13 22 37
Planning the type of work I’ll do in retirement 11 5 7 11 20
Working with a financial advisor or similar professional to develop a retirement plan 10 2 10 9 20
Getting insurance to cover long-term health care costs 8 4 9 7 14
Other 8 9 7 7 8
I have not started retirement planning. 22 33 21 20 10
I have already retired and had planned for retirement. 18 22 26 16 10
I do not plan to retire.
10
17
5
6
5

TABLE 2
AGE AT WHICH RESPONDENTS BEGAN TO PLAN FOR RETIREMENT- BY AGE
“At what age did you, personally, start planning for retirement?”
Base: Planning for Retirement

Current Age
Total N=2143 Ages
18-34
N=457
Ages
35-44 N=436
Ages
45-54 N=656
Ages
55 and over
N=594
% % % % %
Age 13 – 20 9 24 9 5 3
Age 21 – 24 10 27 9 5 2
Age 25 11 18 16 7 4
Age 26 – 29 10 21 13 5 4
Age 30 12 7 22 14 7
Age 31 – 39 16 3 26 20 13
Age 40 – 49 21 0 6 37 34
Age 50 – 59 8 0 0 6 25
Age 60 and over 2 0 0 0 9
Mean 33.3 23.6 29.1 35.6 42.8

Note: Percentages may not add up to 100% due to rounding.

Methodology
This survey was conducted online within the United States between January 8 to 10, 2007 among 4,037 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.
All surveys are subject to several sources of error. These include: sampling error (because only a sample of a population is interviewed); measurement error due to question wording and/or question order, deliberately or unintentionally inaccurate responses, nonresponse (including refusals), interviewer effects (when live interviewers are used) and weighting.
With one exception (sampling error) the magnitude of the errors that result cannot be estimated. There is, therefore, no way to calculate a finite “margin of error” for any survey and the use of these words should be avoided.
With pure probability samples, with 100 percent response rates, it is possible to calculate the probability that the sampling error (but not other sources of error) is not greater than some number. With a pure probability sample of 4,037 one could say with a ninety-five percent probability that the overall results would have a sampling error of +/-3 percentage points. Sampling error for data based on sub-samples may be higher and may vary. However, that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated.
About the Survey
The Wall Street Journal Online/Harris Interactive Personal Finance Poll is an exclusive poll that is published in the Personal Journal Edition of The Wall Street Journal Online at www.wsj.com/personaljournal.
About The Wall Street Journal Online
The Wall Street Journal Online at WSJ.com, published by Dow Jones & Company (NYSE: DJ; www.dowjones.com), is the largest paid subscription news site on the Web. Launched in 1996, the Online Journal continues to attract quality subscribers that are at the top of their industries, with 788,000 subscribers world-wide as of Q3, 2006.
The Online Journal provides in-depth business news and financial information 24 hours a day, seven days a week, with insight and analysis, including breaking business and technology news and analysis from around the world. It draws on the Dow Jones network of nearly 1,900 business and financial news staff-the largest network of business and financial journalists in the world. The Online Journal also features exclusive content, including interactive graphics on business and world news, and online-only columns about the automotive industry, technology, personal finance and more.
The Online Journal offers three industry-specific verticals: the award-winning Health, Media & Marketing and now Law. Health offers authoritative analysis, breaking news and commentary from top industry journalists. Media & Marketing is designed for professionals in the advertising, marketing, entertainment and media industries. Law is designed to provide law firms and attorneys timely information on events and trends important to the legal market. Subscribers to all also get access to the full content of the Online Journal.
In 2005, the Online Journal was awarded a Codie Award for Best Online News Service for the second consecutive year, and its Health Industry Edition was awarded Best Online Science or Technology Service for the third consecutive year. In 2004, the Online Journal received an EPpy Award for Best Internet Business Service over 1 million monthly visitors.
The Wall Street Journal Online network includes CareerJournal.com, OpinionJournal.com, StartupJournal.com, RealEstateJournal.com and CollegeJournal.com.
About the Financial Services Practice
The Harris Interactive Financial Services Practice provides custom, global research solutions to leading companies in the financial services industry. Research professionals with specific expertise across a range of financial services sectors, including banking, payment systems, securities and investments and insurance, act as strategic partners to their clients. The Financial Services Practice plays a key role in branding initiatives, customer profiling and segmentation, new product development, customer loyalty management, market planning initiatives and studies that support clients as thought leaders. (www.harrisinteractive.com/financial)

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