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Workers plan to stay on the job until they're 80

December 02, 2011

| Money Rates Columnist

A new study appears to show how woefully unprepared Americans are for retirement.

This survey released by Wells Fargo reveals that a quarter of us plan to work until the age of 80 because we haven't put enough in retirement savings accounts to quit work earlier.

The study surveyed 1,500 Americans ranging in age from 20 to more than 70 and earning between $25,000 a year and $99,000. Three-fourths of those people said they plan to work past normal retirement age.

In addition, about half said they would continue in their current jobs or a job with similar responsibilities. This fact raises questions about whether these workers can continue at the same level of work, and what it means to younger workers who typically move up the ranks and take over jobs when more experienced workers retire.

The survey also revealed:

  • More than half said they need to significantly cut back on spending now and put more money into savings accounts for retirement.
  • The average person has saved only 7 percent of what they had hoped to squirrel away in retirement savings accounts. In other words, if their goal had been to have $350,000, most Americans have actually only put $25,000 toward retirement.

Despite these sobering conclusions, the survey also showed that 75 percent of those with access to a 401(k) savings account are using it, with a median contribution of 6 percent. More than half would like to see their automatic contribution rate increased by 1 percent a year.

Luckily, there are steps you can take now to improve your retirement situation, such as cutting expenses, paying off debt and boosting your savings rate. While retirement may be a challenging prospect for many, careful planning is the first step toward a comfortable retirement.

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