The average U.S. household is making progress in preparing for retirement despite aggravating conditions such as rising interest rates and soaring fuel costs, according to a twice-yearly national survey of working Americans by Fidelity Investments. Workers are on track to replace 57% of their income in retirement, up from 56% for the fall 2005 survey, according to a news release about the Spring 2006 Fidelity Retirement Index.
The latest survey found that more than half of respondents had taken action — including boosting contributions to workplace retirement savings accounts or consulting a financial professional — to "improve their readiness." In the release, Fidelity Vice Chairman and COO Robert L. Reynolds cited such moves as hopeful signs that Americans are coming to grips with the scale of efforts needed to prepare for retirement.
However, Americans are still facing "a more than 40% pay cut" in retirement, while Fidelity says "a reasonable starting point when planning for retirement" is replacing 85% of pre-retirement income. And 83% conceded they are not saving enough for retirement, up from 78% in June 2005.
The latest online survey comprised 2,000 Americans who were 25 years or older, with full-time jobs and $20,000 a year or more in earnings.