Nearly one-third of U.S. adults who would like to retire are unsure if they will be able to or don't believe they will ever be able to, according to a new survey by Pentegra Retirement Services.
Conducted by Harris Interactive in September, the survey also found that only 19 percent believed they would be able to retire at age 65.
The survey also found that young adults have an "unrealistic perception of how much money they need to retire," according to Rich Rausser, senior vice president of client services at Pentegra. Adults ages 35 to 54 (27 percent) are more likely than those ages 18 to 34 (18 percent) to say they will need more than $1 million to retire. Those ages 18 to 34 (62 percent) are more likely than those ages 35 to 54 (45 percent) to think they will only need up to $500,000 to retire.
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"Younger adults new in the job market are likely making a lower salary and basing their retirement thinking on where they are now in their life, but they need to realize that their cost of living and expenses later on will be significantly different," said Rausser.
The majority of U.S. adults, 92 percent, feel that some of the average person's paycheck needs to go toward retirement planning. On average, they believe that 14 percent should be contributed from each paycheck toward retirement.
"This is much higher than Pentegra had predicted and we are thrilled that people have solid hopes and plans for their future. However, this number can scare people away with the thinking that they could never realistically put that much money away each paycheck – 14 percent is overwhelming for some people. The important lesson here is that it doesn't have to be all or nothing."
The survey found that 21 percent of adults with children under the age of 18 admit they have not planned for retirement, whereas 12 percent of childless adults admit the same thing.
Only 28 percent of adults who have planned for retirement were helped in their preparation by their parents.
A full one-third of those who have planned for retirement say they were helped by a professional financial advisor. Twenty-eight percent of adults who have planned for their retirement say that no one helped them prepare for this, compared to 31 percent of those who are already retired.
Twenty-one percent of women said they were unsure about when they would retire compared to 13 percent of men. On average, adults ages 18 to 34 believe they will be able to retire at age 62; adults ages 35 to 54 estimate retirement at age 65; and those over 55, estimate retirement at age 67.
Over three-quarters (78 percent) of adults planning to retire feel they need up to $1 million to retire. Eighty-three percent of women and 72 percent of men said they felt this way. More men than women believe they will need more than $1 million to retire.
"For so many Americans planning for retirement seems too enormous to tackle and it feels like it is already too late. But this is not so. Start with 1 percent, 2 percent, 3 percent of salary. Commit to a plan of auto-escalation, each year increasing to your retirement plan by 1 percent. With salary increases and the tax break associated with employee deferrals, it should be fairly painless. And the numbers will budge. It is never too late," Rausser said.
Saving just $4 a week over the course of 25 years can boost your retirement savings by $16,608. Saving $30 a week can boost those savings by a staggering $124,469 over that same 25-year period.
"The more time your savings have to grow, the more you can take advantage of the effect of compounding. Compounding is what happens when you earn money not just on contributions to your account but also on the earnings themselves. It is interest on interest, and that means your account grows faster," he said.
Nearly 2,400 U.S. adults were surveyed for this study.
Pentegra Retirement Services provides retirement plan solutions to organizations nationwide.
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