Aging and Finance Dilemma: Majority of Americans in Their 50's Say They Will Not Have Enough Money to Live in Retirement at Their Desired Standard
Business Wire - March 02, 1998 15:25
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BOSTON--(BUSINESS WIRE)--March 2, 1998--
Nearly Four in 10 Expect to Have to Work in Retirement
Recent Survey of Americans Over Age 50 Illuminates Aging and Finance
Issues to be Addressed by New AARP Andrus Foundation
Center on Aging and Financial Security
The majority of Americans in their 50s acknowledge they will have to lower their living standards in retirement, and many (nearly 40%) are facing the unexpected necessity of having to work in what would be their retirement.
These are broad findings of a recent survey of Americans age 50 and over conducted by Scudder Kemper Investments Inc. and the AARP Investment Program from Scudder.
The findings illuminate the issues to be addressed by the new AARP Andrus Foundation Center on Aging and Financial Security, which was officially launched today as a result, in part, of a $5 million gift from Scudder. The not-for-profit Center is designed to initiate, interpret and disseminate research and insight on the subject of aging and finance.
According to the survey, which was fielded last month:
Lifestyle Sacrifices Are a Reality for Older Americans - 60% of Americans between the age of 50 and 54 do not have, or
do not expect to have, enough money to live at their desired
standard in retirement.
- 16% are confronting this situation already;
- 44% say they expect to face this situation in the future.
- More then a third (36%) of those in their early 60s do not
have, or expect not to have, the money to live at their
desired standard in retirement. Working During Retirement: Mandatory for Many
- Nearly four in 10 Americans now in their 50s (39%) say they
face, or expect to face, the previously unanticipated reality
of having to work during their retirement years. Higher-Than-Expected Expenses Taking Their Toll on Older Americans
- Among Americans in their early 50s:
- 16% are providing for an elderly parent now
- 19% expect to have to do that in the future
- 13% are now paying more than they expected for a child's
college education
- Another 13% expect to have to pay more than they
anticipated for a child's college education in the
future.
- 53% of Americans now in their early 50s are concerned about
managing higher-than-expected living expenses. Said Lin Coughlin, managing director of Scudder Kemper Investments Inc. and chairperson of the AARP Investment Program from Scudder, "These findings, as well as our ongoing involvement with Americans over 50, underscore the importance and scope of the finance and aging problem. While attention to this area is growing, there is a clear need for continuing research. By establishing a not-for- profit center to serve as a reliable repository and interpreter of information, the AARP Andrus Foundation will help find solutions to the challenges older Americans face to maintain financial independence."
A Clear Need for Guidance
Other findings highlight older Americans' need for guidance in
attaining financial security in old age. For instance: - 32% of Americans in their early 50s, and 21% of those in their
late 50s, are worried they may not be making adequate
contributions to their retirement savings accounts.
The AARP Andrus Foundation Center on Aging and Financial Security
opens against the backdrop portrayed by the recent survey, as well as
these generally accepted facts: - 20% of the nation's elderly are "near poor," and 40% of people
65 and older living alone are poor. (U.S. Census)
- The poverty rate for older women is at least double that of
men. (U.S. Census) - Only 20% of current retirees figured out their retirement
income needs before retiring. (Employee Benefits Research
Institute survey)
- Nearly half of all adult Americans -- 48% of women and 38% of
men -- report feeling a "lack of control" over their finances,
or having difficulty making investment decisions. (1997 study
Scudder Kemper in collaboration with the National Center for
Women and Retirement Research) Scudder Kemper Investments Inc., headquartered in New York City, is one of the world's leading investment management organizations, managing more than $200 billion in assets globally for mutual fund investors, retirement and pension plans, institutional and corporate clients, insurance companies and private family and individual accounts.
The AARP Investment Program from Scudder is a comprehensive family of mutual funds designed to meet the investing needs of individuals 50 and over. Each AARP Mutual Fund seeks to provide returns competitive with similar funds, but with less downside volatility. Founded in 1985, the Investment Program consists of 13 mutual funds and two "fund of funds" managed portfolios.
The mission of the AARP Andrus Foundation is to enhance the lives of older persons through research. Tax-deductible contributions support efforts to help individuals maintain independence throughout life. The Foundation accomplishes this work through aging research, educational initiatives and public information programs with emphasis on financial security and living with chronic health conditions. Established in 1968 as a memorial to Dr. Ethel Percy Andrus, the Foundation is a 501(c)(3) charitable and educational organization affiliated with the American Association of Retired Persons.
The survey results discussed in this press release are based on a telephone survey conducted by Michaels Opinion Research Inc. among a random and representative sample of 680 Americans age 50 and over living in private households in the continental United States. Interviewing was conducted during the period of February 5-8, 1998. For results based on a weighted sample of 680, the margin of error due to sampling and other random effects is +/-4.0 percentage points and is greater for smaller sub-groups of respondents.
This information must be preceded or accompanied by a current Prospectus of the AARP Investment Program. Contact: Scudder Investor Services, distributor, Two International Place, Boston, Mass. 02110-4103, 1-800-322-2282. Investors should read the prospectus carefully before investing or sending money.
CONTACT: Scudder Kemper Investments Inc., New York
Eleanor Mascheroni, 212/326-6753
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