401(k) Contributions Scaled Back, Retirements Postponed
TEWKSBURY, Mass. -- Due to the current economic slowdown, nearly one in five in a new AARP survey said they have stopped or reduced putting money into their 401(k)s and individual retirement accounts and 20% have postponed a planned retirement.
The AARP Financial Inc. surveyed 750 adults age 40 or older in pre-retired households Aug. 1-21. Respondents had an annual household income between $35,000 and $100,000 and between $10,000 and $150,000 in savings and investments.
The survey revealed that 55% have not set their 401(k) contribution to the maximum allowed and 78% of those eligible have not made a catch-up contribution to a retirement plan. Twenty-two percent of respondents said they do have a formal written plan for retirement.
Putting off a planned retirement was a concern for those surveyed. Most believed the odds are 50% or less that they will be able to retire when they want. Seventy percent agreed that when it comes to retirement, no one is looking out for the "average person" while 67% are not sure where to go for help.
"Increases in the cost of basics such as food, healthcare and energy are accelerating," said Richard Hisey, president of AARP Financial. "Unfortunately, in these times--with necessities assuming a greater share of the household budget--retirement savings are frequently the first to take a hit."