Experian-Gallup Poll Shows One-Third of Consumers Have No Money Saved for Retirement

COSTA MESA, CA – Experian® and The Gallup Organization today announced that the latest Experian-Gallup Personal Credit Index^SM finds a public that is much more worried about its overall credit situation than it was last month. The Personal Credit Index is now at 79, down 15 points from last month and at the lowest level since its launch in March. More results for the Personal Credit Index can be found at www.PersonalCreditIndex.com.

“The overall decline in the Personal Credit Index is fueled by lower confidence consumers have about both their present and future credit situations. Consumers are concerned about being able to pay their monthly bills, maintain their credit ratings and extend their debt if necessary,” said Ed Ojdana, group president of Experian Interactive. “With gas prices rising and the price of oil fluctuating at all-time highs, it appears that consumers are feeling the pinch.”

In addition, the Experian-Gallup survey shows that 40 percent of consumers are worried about having enough money to live comfortably when they retire. One-third of consumers say they have no money saved for retirement, and about 50 percent save for retirement regularly.

“Consumers are feeling less confident about their ability to pay their monthly bills, so what may be suffering is their ability to save additional funds for retirement at the same time,” said Dennis Jacobe, chief economist for The Gallup Organization. “With that in mind, our survey also showed that consumers today expect to retire later than they expected five years ago.”

The survey finds that about 20 percent of all non-retired consumers today expect to retire before reaching their 60th birthday and another 20 percent before they reach 65. At the other end of the spectrum are about 23 percent of consumers who expect either “never” to retire (11 percent) or who expect to retire after reaching the age of 70 (12 percent). Right in the middle are 30 percent who say they will retire at 65 or a few years later.

When asked how their expectations now compare with five years ago, most consumers gave similar responses. However, the average age at which consumers expected to retire five years ago was 61.2, just about a year younger than the current projected age. The number of consumers who expected never to retire, or to retire after age 70, was slightly lower five years ago than it is now — 15 percent rather than 23 percent.

In the wake of dire warnings about the financial viability of the government’s Social Security system, many consumers are skeptical that they will get “all” of the benefits that they would get if they retired now. Indeed, just 18 percent of Americans are that optimistic, though another 18 percent expect to get “most” of the benefits and 38 percent expect to get “some” benefits.

Despite their concerns about how much of the current benefits they will eventually receive, almost eight in 10 consumers expect Social Security to be either a major source of retirement income (28 percent) or a minor source (51 percent). Just 19 percent say they expect to receive no Social Security benefits. Among consumers under the age of 30, about a quarter expect to receive no benefits, but the other three quarters are hopeful. Still, young people are most likely to cite a 401(k) plan and, separately, their own personal savings as the major sources of their retirement income.

Overall, 58 percent of consumers say they are confident they will have enough money to live comfortably in retirement, while 40 percent are worried that they won’t have enough money, including 16 percent who are “very” worried. Surprisingly, younger consumers are not more or less worried than older people. However, lower-income consumers and women are much less confident than higher-income consumers and men.

Among people earning less than $40,000 a year, just 42 percent are confident, compared with 62 percent who earn from $40,000 to $75,000 and 73 percent who earn more than $75,000 a year. Similarly, 65 percent of men are confident they will have enough money for retirement, compared with only 50 percent of women.

Among consumers who are already retired, 76 percent say they own a home. Also, among these homeowners, there is little inclination even to consider a reverse mortgage for additional income. Just 13 percent say they would consider it, and another 1 percent says they already have one. However, 79 percent say they would not consider such a loan.

Retired consumers also are not likely to use an equity loan or equity account to pay for their medications. Just 3 percent of retired homeowners say they have ever done that, while 96 percent say they have not.

“We conducted additional research regarding the credit of retirement-age consumers using Experian’s National Score Index^SM and found that the average credit score for consumers who are 60 or older is 734,” said Ojdana. “This age group has the highest average credit score of all the age groups analyzed. Having a higher credit score means this age group may have more borrowing options readily available if needed.”

More information about the Experian-Gallup Personal Credit Index can be found on the official Web site at www.PersonalCreditIndex.com. In addition, for information about average credit scores and other credit-related data at the national, regional, state and local levels, visit Experian’s National Score Index Web site at www.NationalScoreIndex.com.