Workers in their 50s believe that their efforts to fund employer-sponsored 401(k) and 403(b) plans as well as IRA and Keogh investments will make them more prosperous in retirement than their now-retired peers, according to a study by the AARP Investment Program, managed by Scudder, Stevens & Clark, New York.
The study found that workers in that age group are taking a more active role in funding their retirement than today's retirees did.
More than half (51%) of retired Americans say Social Security is their primary income source. The next income source (by 21%) is employer pension and profit-sharing plans, excluding 401(k) plans. From all sources, retirees have an average yearly income of $28,700.
Of Americans over 50 who still work, only 28% plan to rely on Social Security as the main source of retirement income. Instead, 17% - vs. 2% of retired people - say their primary retirement income source will be the 401(k) and 403(b) plans to which they've contributed. They expect substantially more income in retirement than retirees - an average of $38,300 per year from all sources, with an expected average of $32,900 per year from 401(k) and 403(b) plans alone.
Those expecting to be in the work force for over five years anticipate total retirement incomes of about $40,000 per year compared to $36,000 for those expecting to retire sooner.