WASHINGTON -- Americans age 50 and older don't expect their golden years to be very golden, according to a survey by Scudder Kemper Investments, New York, on behalf of the AARP Andrus Foundation, Washington.
Older Americans are more worried than ever about the adequacy of their contributions to retirement savings accounts, the lifestyle changes they'll face in retirement because of lower incomes, the plans they are making to work during retirement, and the higher than expected expenses they could face.
"The important thing is not to despair," said John Feather, director of the AARP Andrus Foundation, which seeks to enhance the lives of older people through research.
He attributes the dilemma faced by Americans in their 50s to cutbacks in companies' retirement programs, increases in expenses and a lack of awareness of financial status, in addition to the expected Social Security crunch.
About one-third of Americans ages 50 to 54 said they were concerned about whether their retirement plan contributions will be sufficient for their long-term needs.
Changes in lifestyle will be a fact of life for most over age 50, according to the survey of 2,033 Americans. Sixteen percent say they currently are confronting the situation of not having enough retirement savings to live at desired standards. Another 44% say they expect to face this situation in the future.
Those with children under the age of 18 are more likely than those with no children or grown children to say they expect they won't have enough saved, 36% versus 20% respectively. This could be because of higher-than-expected college education costs, the study suggests.
At the time of their lives when most are supposed to be saving, they have expenses, Mr. Feather said.
Medical expenses may be a big part of the problem. About 16% say they are currently providing care for an elderly parent, while another 19% say they expect to fund such care in the future.
One in 10 Americans age 50 and older say they are paying unexpected medical expenses. Of those in their early 50s, 13% report having unexpected medical bills now, and an additional 36% expect to deal with such expenses in the future.
To come up with the additional money, most plan to work longer than they originally planned, either by keeping their current jobs longer or by finding other employment after they retire. Nearly four in 10 in their 50s say they will have to work during what they expected to be their retirement years: 7% face this situation now; 32% believe they will have to work beyond the time they had planned.
The survey also indicates that older Americans with household incomes above $35,000 are more likely to say they will have to work for a longer time than expected. More than one-fifth of those with incomes about $35,000 say they are unexpectedly facing having to work during retirement, versus less than 15% of those with incomes below $35,000.
Mr. Feather advises older couples to discuss and analyze their financial situations thoroughly. "You can start saving now," he said.
Although it's difficult for some to talk about what is going to happen financially to a surviving spouse, it is extremely important for both to understand a full range of financial issues regarding family income, Mr. Feather said.
The foundation recently opened the Center on Aging and Financial Security to address "the understanding and awareness of financial security issues for Americans aged 50 and above."
The center is the result of a $5 million gift from Scudder, Kemper Investments and the need identified by the survey for a central research entity,
Part of a $1.5 million grant from the AARP Andrus Foundation will pay for two studies, one focusing on the potential impact of pension privatization on personal financial preparation for retirement through individual and collective savings schemes and another that will analyze data on the variations in savings among retirement-age households.
A third project funded by the new organization will look at theories of program participation by sponsoring a series of training programs for low-income minority women between the ages of 18 and 60. The programs will introduce basic savings strategies and inform women about pension policies. The sessions will be managed by the Women's Institute for a Secure Retirement, Washington.