Retirement? For many, that's no option

Nearly one in three (29%) of those 65 and older are saving at least 15% a year. That's the highest rate for any age group, although the survey base size for this group was small. An additional 15% of those who are at least 65 set aside 11% to 14% of their income. Among 50- to 64-year-olds, 23% save at least 15% of their income, and 20% save between 11% and 14%.

The mantra of saving early is sticking

Younger workers are faring well, too. Although they can still amass large fortunes by saving even a modest amount while they're in their 20s, plenty seem committed to stashing as much as possible.

Nearly half -- 46% -- of workers ages 25 to 34 save at least 11% of their salaries, with 15% of this group setting aside 15% or more. Among the youngest individuals (18 to 24 years old), 4% hit the high mark by saving 15%, and a respectable 12% stash 11% to 14% of pay. Even though this group was a small percentage of the survey group, the news was encouraging.

"They're getting the message. With the 18- to 24-year-old group, they're just out of college and already saving money. And the 25- to 34-year-old group already has a good head start. If they keep that up, by the time they're 50, the implication is they will be very well off," says Brian T. Jones, a certified financial planner and the author of "Getting Started: The Financial Guide for a Younger Generation. "

Moreover, it's not just young, highly compensated Wall Street cowboys who are saving. A great number of modestly paid employees -- again, many of whom tend to be younger -- are just as apt to set a great deal aside.

Roughly three in 10 of those earning $20,000 to $29,900 say they save 11% or more of their income annually. An additional 27% of that group saves 5% to 10% of pay. But 19% of those earning less than $30,000 save nothing.

Those who fare the worst earn less than $20,000 annually. Among them, four out of 10 save nothing. Yet what may be among the most impressive findings of all is that 19% of those with gross yearly pay under $20,000 manage to save 11% or more. (This group was a small base size in the survey.)

"They're not hitting peak earnings years, but if they get a company match, then they'll be well into the teens," Jones says. "Retirement won't be as dreary as everyone says it will be."

Age drives retirement expectations

Even when savings levels are modest, optimism about retirement ranks high.

When asked "Do you think life will be better, worse or about the same when you retire?" 38% said they expected better things to come. An additional 41% said life should be about the same. Only 18% saw life getting worse.

But yet again, age, more than any other factor, drives expectations. Younger and even lower-paid workers report to be far more bullish about their future than older, better-paid individuals. Specifically, 44% of individuals 18 to 49 expect life to be better. That's almost twice found in the over-50 group. (Among them, 24% expect things to improve when they retire.)

Income seems less important. Roughly four out of 10 respondents in all income levels -- that is those who earn under $20,000 annually up to those who make more than $75,000 -- expect life to get better in retirement. Those who earn between $20,000 to $29,000 are most optimistic, with slightly more -- 46% -- counting on greater things to come.

It's the midlevel career crowd, with incomes between $40,000 and $49,000 annually, who are the most pessimistic. More than one-quarter of them (26%) expect life to be worse in retirement. That's far higher the 16% of lower-income workers raking in less than $20,000 who agree with that sentiment.

That negativity among the relatively well-paid may not make sense until one recalls that most of the people in this crowd are those same 35- to 49-year-olds who've put retirement savings on hold even as they're profoundly aware they've got to pay for it, says Dee Lee, a certified financial planner and the author of "The Complete Idiot's Guide to Retiring Early," who counsels individuals nationwide about retirement.

"They're in a consumption phase, and there's really not much money left," says Lee. "They want the house, but maybe they bought it 12 years ago. The fridge goes; the screen door goes. Paying for those kinds of things add up. They have child care, which can be as much as $50,000 a year. They want that all-American dream, the house, the kid, the backyard, the two cars. It's not like they don't know retirement is there for them. But they're stuck."

Worry about the future

Perhaps it's not surprising then that this same crowd of 35- to 49-year-olds is most fearful about the future. When asked "How much do you worry about outliving retirement savings?" 21% of them said "a great deal." On average, just 14% of individuals of all ages worry this much.

Generally though, the survey found that Americans are optimistic about their cash flow in retirement. Forty-two percent of the people surveyed said they "never worry" about outliving their money.

That last statistic doesn't impress Bellmer, of the National Association of Personal Financial Advisors. "The 40% who don't worry are analogous to an ostrich. They just don't want to think about it. Retirement is a problem for another day."

This article was reported and written by Leslie Haggin Geary for Bankrate.com.

Published July 13, 2007

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