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Retirement perceptions in the USA

Retirement perceptions

The American retirement system is in a state of transition. In the USA, only half of workers have access to an employer-provided retirement plan. An increasing percentage of employers that offer plans are now automatically enrolling their employees into a defined contribution retirement savings plan, mainly employer-sponsored 401(k) plans. While large employers typically offer retirement plans, many smaller employers do not. The SECURE Act, which became law in late 2019, makes it easier for small business owners to join pooled employer plans that can be less expensive and easier to administer, bringing access to many more savers, including part-time workers.

Our research uncovers attitudes, beliefs and opinions of 2,654 adults across the USA, representative of all American adults, and points to a picture of gaps in advice and expectation between what participants need, and what the market currently offers.

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,654 adults. Fieldwork was undertaken between 19-23 November 2020. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+) – Future of Global Retirement Report 2021 – smart.co

The advice gap

Americans have a fair understanding of their retirement options and many know where they would look for advice. Many participants look to their retirement plan providers for advice on planning retirement, but this advice is falling badly short of expectations.

Advice and understanding

Over half of US respondents (53%) – and 75% of those over 55 – believe they have a good understanding of the retirement options available to them. This is a far higher level of understanding than in other regions, though it still leaves a sizeable number of Americans – even at age 55 and beyond – without a good understanding of their path forward.

Service gap - expected sources of retirement advice for Americans – Future of Global Retirement Report 2021 – smart.co

When seeking advice, just under half of US respondents would expect to be able to turn to financial advisers (41%). Two in five would also seek advice from their retirement plan provider (42%), closely followed by turning to friends and family for advice on options regarding their retirement savings (35%). A quarter of all US respondents (24%) did not know where they might be able to seek advice regarding finances during retirement.

Taking advice

Almost four in every ten respondents (38%) have never taken advice on their retirement financing. Intuitively one might expect younger respondents not to have received advice, but worryingly this number remained surprisingly consistent into older age groups approaching retirement, with 42% of those aged 55 and above saying they have never received any advice.

Service gap - a lack of retirement advice for Americans – Future of Global Retirement Report 2021 – smart.co

Where respondents have received advice, financial advisers were most highly rated (17% saying they were most useful). Worryingly, this number was closely followed by ‘friends and family’ as the source of most useful retirement funding advice (15%). And, while 34% of respondents had said they would turn to a retirement savings provider for advice, just 9% rated their provider as their most useful source of information. There is clearly a big gap between what retirement plans are giving retirement savers, and the advice that savers would like, and expect, to receive from them.

Traditional ‘retirement’ is over

Retirement ages are rising and people increasingly expect retirement to be a multi-stage transition rather than a one-off event. The idea of reaching a particular age and swapping workplace income directly for retirement savings is long gone.


Most Americans plan to access their retirement savings in their late sixties - Future of Global Retirement Report 2021 – smart.co

65-69 was the most commonly quoted expected age to begin accessing retirement savings (36%), followed by 60-64 (14%). The median answer here rose by age group, with those aged 18-24 providing a median of 55, and those aged over 45 providing a median of 65.

Most Americans see retirement as an event with several stages - Future of Global Retirement Report 2021 – smart.co

Almost nine in every ten US respondents (88%) see retirement as something other than a ‘one-off event’. Just 9% of male respondents saw it as a singular event, and 14% of female respondents. Of those who have a view, more than half of Americans now see retirement as a series of stages.

Three in ten respondents (31%) expect to continue working part time, even after beginning to access retirement savings, while one in five (20%) expect to supplement retirement income with another form of investment.

All of this points to a very different picture of ‘retirement’ to the idea the word used to represent – so different that we can safely say traditional ‘retirement’ is over. The pattern of reaching a point in life where work ends and a consistent retirement income sustains Americans for the remainder of their lives is gone for all but a small few.

Lifestyle realities and fears

Americans’ primary worries in retirement funding are related to healthcare, day-to-day living costs and a perceived need to adjust to a more limited lifestyle.

Adjusting lifestyles

Three in ten respondents (31%) expect their spending to decrease in retirement. This number is swayed a little lower by younger respondents, and among those aged 55 and older rises to 41%.

Older Americans expect to spend less in retirement – Future of Global Retirement Report 2021 – smart.co

Overall, 17% expect their spending in retirement to be greater than their current level of spending. Again, this is swayed by younger respondents, pointing to a picture of younger people on lower wages believing their retirement will be less frugal than their current lifestyle, while older respondents approaching the age of retirement see a future of increased personal austerity.

Concerns and fears

The biggest concern in retirement among US respondents is not being able to afford healthcare costs, with 45% overall saying this is a concern, rising to exactly half (50%) of all respondents aged over 55.

Overall, accommodation costs and day-to-day living costs are the next largest concerns, with 41% of respondents saying they are concerned about these areas.

Of those aged over 55, living their desired lifestyle is the second highest concern, with 44% responding that they are concerned about having to limit their lifestyle.

Healthcare and accommodation are the main concerns when it comes to retirement in the US – Future of Global Retirement Report 2021 – smart.co

Roughly one in five (18%) of all respondents have no concerns about finances during retirement, rising to 22% ( just over one in five) of those aged over 55.

In the context of the ‘advice gap’ uncovered by our research, these worries and concerns point to a great need to guide those reaching retirement in how to spend their money to balance current and future needs. Savers fear running out of money, at the same time as worrying about having to limit their lifestyle too much.

Control and flexibility: key retirement saving needs

Americans want ownership of their decisions, control to flex their finances and ‘easy access’ to their money.

Most Americans want to have ownership of their retirement decisions. Three in ten US respondents (29%) would like to manage all their retirement finances entirely themselves, rising to 38% of those aged 55 or older. A further 40% would like control with balance – to have assistance when it comes to managing their finances (35% of those aged over 55). Just one in ten Americans (10%) want to hand over all management of their retirement finances to another party.

Most Americans want to have ownership of their retirement decisions - Future of Global Retirement Report 2021 – smart.co

When asked how they wanted to access their retirement finances, almost one in four Americans (23%) did not know how they wanted to access their money. Even among the 55+ age group, 21% did not know. This points back to the ‘advice gap’, and also illustrates the great need to balance a system where many wish for full control of their finances, while many – even approaching retirement age – have limited knowledge of the options available to them.