What is behind the fear that 50 percent of Americans have about retirement? Is the employment gap an illusion? Or, will retirement be postponed until the drop dead reality hits  that life without work is a pipe dream for the average American?

Here are some of the not so cheerful details provided by TD Ameritrade Holding Corporation in their recent survey findings. 

Forty-nine percent is the average amount the working Baby Boomer has saved toward his or her total retirement savings goal.  This makes sense because Boomers are not leaving the workforce in the droves as was once anticipated.

Working members of the World War 11 Mature Generation have saved on average 71 percent, Generation X have reached 26 percent and Generation Y have achieved 15 percent of their respective retirement savings goals. It seems that if there is a looming employment gap, it will be as the Mature Generation retires and everyone else scrables for available slots.

Or — do these statistics lend credence to the notion that in the next 10 years the largest number of entrepreneur based business will enter the arena. It makes sense if Baby Boomers begin to quantify their knowledge base into a marketable commodity.  Clearly retirement is too big an issue to accept the gold watch.

Retirement, a concept that once conjured up images of green golf courses and sandy beaches, today evokes feelings of “regret,” “frustration”
and “envy,” according to many Americans. In fact, one out of every two Americans surveyed said they are not looking forward to retirement – a
sentiment being fueled by the fear of not having enough money saved in time, according to nearly 30 percent of respondents.

These findings come as no surprise when you consider that the median net worth of the American family dropped 39 percent between 2007 and
2010, according to the Federal Reserve Board’s Survey of Consumer Finances (SCF) released earlier this week.

The Challenges
Market and economic events of the past decade have made putting money aside for retirement challenging for many Americans. Lack of steady employment, debt, education and healthcare expenses were most often cited by the three-quarters (73%) of respondents who say obstacles have prevented them from saving for a comfortable retirement.

To make matters worse, over two-thirds (69%) of respondents have no specific savings goal. Among those who have a specific savings goal, the average amount is $750,000, regardless of age. Just 54 percent are confident they will reach their goal, citing a bad economy, not enough income, expenses and not enough time as the reasons they may not be successful. On average, respondents also would have liked to start saving for retirement eight years earlier than they actually did.

The Future
Most Americans (80%) envision having to work part- or full time in retirement. On average, they think they will need income for 18 to 22 years of retirement, slightly less than the 20 to 25 years that statistics indicate they will actually need.

Eighty percent of respondents said they believe they will require the same amount of income they currently live on or less, but this may not be realistic given that inflation and rising healthcare costs can significantly impact financial needs. In fact, one-third of those who are currently retired say they have had to change their style of living – and almost a quarter of them have gone back to work. Their advice to younger generations: Save as much as you can as early as you can, establish a financial plan, limit expenses and work longer.

“There’s no doubt the economic climate in recent years has presented significant challenges for those planning ahead and saving for retirement,” said Lule Demmissie, managing director, investment products and retirement at TD Ameritrade, Inc. (“TD Ameritrade”). “They key is to focus not on what you can’t do, but rather what you can. Consider how you navigate challenging issues and move past them to achieve  your financial goals.”

The Psychology
Current retirees are relatively satisfied with their place in life and maintain a positive outlook, but younger generations still in the planning phase are not so optimistic – experiencing a wide range of emotions.

Matures – Proud, satisfied and positive
Despite the fact that half of this senior generation said they had to make cutbacks or lifestyle changes in retirement, they generally report feeling proud, satisfied and positive about retirement. They fear retirement the least and are the most content compared to younger generations.

Baby Boomers – Anxious and regretful
While they report they are looking forward to retirement more than any other generation, Baby Boomers’ outlook is generally bleak. They feel their financial situation in retirement will be worse than it is now, and are plagued with feelings of anxiety and regret over their financial situation.

Gen X – Embarrassed, frustrated and envious
More than any other generation, Gen X is not confident in their approach to saving for retirement and is the least confident when it comes to reaching their retirement savings goals. Feelings of embarrassment, frustration and envy dominate this generation when faced with retirement.

Gen Y- Disinterested and lacking control
With retirement so far away, Generation Y feels out of control and generally disinterested in the next phase of their life. Despite this lack of interest, they are optimistic as they, more than any other generation, believe their financial state in retirement will be better than it is now.

So what can Americans do to combat the various emotions surrounding retirement and make a change for the better? “Getting over any negative
psychological feelings associated with retirement is the first step to getting on track. Once you can get past those, a lot of practical plans start to surface,” said Demmissie.

About the Survey
An online survey was conducted with N = 2029 U.S. residents from March 27-28, 2012 by Head Research on behalf of TD Ameritrade Holding
Corporation. The sample was drawn from major regions in proportion to the U.S. Census: New England (5%), Mid-Atlantic (16%), South (25%),
Midwest (22%), Southwest (12%), West (20%). In each region, half of the respondents were male and half were female. Quotas ensured at least n
= 500 respondents from each age cohort of interest to TD Ameritrade: Mature Generation (1930 to 1945): n = 502 (“Matures”); Baby Boomers
(1946 to 1964): n = 504 (“Baby Boomers”); Generation X (1965 to 1976): n = 505 (“Gen X”); Generation Y (1977 to 1989): n = 518 (“Gen Y”). All
respondents were required to be sole or shared decision makers with respect to planning and saving for retirement. The average time required
to complete the survey was 10 minutes. The statistical margin of error in this survey is +/- 2.2%.

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By Dianne Crampton

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