Financial advertising often urges people to calculate how much money they'll need to retire. The theory is that this will prompt them to save and invest more—and, hence, to make greater use of the advertisers' services. Alas, a survey conducted for AARP finds that such planning isn't reliably a catalyst to action.
Conducted among working households in which nobody has the old style of defined-benefit pension plan, it found 43 percent have begun trying to figure how much they'll need to salt away. But fewer than half of those who've taken this step—44 percent—claim to have improved their financial behavior as a result. As the chart shows, many Americans have passed age 50 without having saved at all for retirement. (And many others don't know what they've got.) It's not as if they have much in non-retirement funds. Just 24 percent have $150,000-plus, aside from home equity; 35 percent have under $50,000.
Irrespective of age, workers who don't have access to a 401(k) or similar plan (referred to in the report as "Have-nots") are in significantly worse shape than those who do have such access (the "Haves"). The Have-nots are twice as likely as the Haves (18 percent vs. 9 percent) to say they're "not at all confident" of having enough money to live comfortably when retired. And rightly so, as they're more than twice as likely (39 percent vs. 18 percent) to have less than $10,000 in savings and investments, apart from home equity. Ah, well, these circumstances will give them a chance to explore exciting new careers in what would otherwise be their leisure years.