Today’s retirees are the last generation in the United States to live a retirement shaped by the forces of the prior century, standing in stark contrast to baby boomers, Generation X, Millennials and even Generation Z, according to the 2019 Wells Fargo Retirement study, which examines the attitudes and savings of working adults and retirees. Now in its 10th year, the survey spotlights the importance of a planning mindset as people in their working years must shoulder the burden of funding their own retirement.
The survey found several key characteristics that influence today’s retiree, who—in this survey—is an average age of 70. Most striking, more than eight in 10 (86%) retirees fund their retirement primarily with Social Security or a pension; just 5% say personal savings, such as an IRA or a 401(k), is their main source of funding. By contrast, for younger generations the quality of their retirement will depend almost entirely on how much they save through vehicles such as a 401(k) or IRA. Indeed, 45% of Millennial workers say the top source of funding for their future retirement will come from an IRA or a 401(k), compared to just 25% who say they expect to rely on Social Security or a pension for their retirement income.
Fear that Social Security may not be available for retirement represents a concern across all working generations in the survey, with 71% indicating they are “afraid” it won’t be available when they retire. Just over six in 10 workers (63%) say they would have no idea what they would do if Social Security were not available “when they need it,” a concern that jumps to 71% for current retirees.
Across generations, workers and retirees displayed strong emotions on the issue—as 91% of workers and 94% of retirees say they would feel “betrayed” if the money they paid into Social Security were not available when they retire. Moreover, the survey found that workers have much more faith in their personal savings than in Social Security. Only 55% of retirees have more faith in personal savings than in Social Security, which compares to 79% of workers.
At the same time, workers recognize that retirement is increasingly their own responsibility—but they believe that public policy can still play a role. Ninety percent say that Congress needs to make it easier for workers to have access to tax-friendly retirement plans, and 79% say that companies should automatically enroll new employees in their employer-sponsored retirement plans.
You can find the full press release and more results here.