Americans Overestimate Retirement Resources

In this past Sunday's Chicago Tribune business section, columnist Humberto Cruz writes about how the 17th annual Retirement Confidence Survey shows that Americans overestimate their preparedness for retirement.

Some of the points:

1. Only 41% said that they or their spouse is covered by a "defined benefit" pension plan (that pays a monthly pension for life). Yet, 62% of workers expect that they will receive income from one in retirement.

2. 25% of workers surveyed, and 33% of retirees say they have long-term care insurance. Yet, industry estimates are that only 10% of Americans 65 and over have this kind of coverage. So, it looks like people only think they are covered.

3. One third of workers 55 and over have only saved $25,000 or less. Less than half have saved more than $100,000. One third of workers 45 and over are not saving anything for retirement.

4. Despite a government education campaign, only 19% of workers (42% 55 or over) know that the age to receive full social security benefits will rise until it reaches 67 in 2027.

5. More than one-fourth of workers estimate that they can retire on less than $250,000. Assuming a 5% interest rate, $250,000 would bring in only $12,500 a year before taxes.

6. Most workers expect to work at least part time in retirement, but the survey found that 37% of retirees had to leave work earlier than planned, due to health problems, taking care of a family member, etc.