Sweating Retirement Finances

Millions of Americans are uneasy about their financial prospects in old age — a nervousness that complicates President Bush's uphill efforts to persuade them to accept dramatic changes he's proposing for Social Security.

Almost half of Americans who haven't retired say they don't think they're doing a good job of getting ready for that time in their lives, an Associated Press poll found. Many say they're not confident they'll have enough money to live comfortably after they quit working.

"People are trapped in a dilemma," said Robert Blendon, a polling expert at Harvard's Kennedy School of Government. "They know they're not saving enough. They can't count on Social Security and they're not sure these private accounts will be better. They're not sure what to do."

In this uneasy climate, Bush's plan to allow personal accounts within Social Security hasn't caught fire with the public. More than half of Americans, 55 percent, say they oppose his plan to create personal accounts, while 39 percent say they support it, according to the poll conducted for AP by Ipsos-Public Affairs. Support for the plan drops among Democrats and independents when it's described specifically as "President Bush's plan."

Two-thirds of those who say they're doing an excellent job of preparing for retirement support Bush's plan to create personal accounts, while those doing a good job are evenly split. Two-thirds of those doing a fair or poor job of preparing for retirement oppose his plan.

"It's important to people who are not saving enough to know they have some financial base they can count on," said Charles Franklin, a political scientist at University of Wisconsin-Madison who specializes in polling.

One-third of those who haven't retired say they're not confident they'll have enough money to live comfortably in retirement.

Maureen Jones, a 46-year-old wife and mother in Detroit, said she can't save money and her situation makes her uneasy.

"Something's got to be done. Social Security doesn't seem to be working," she said. "My husband is concerned for his Social Security, we're both concerned. We haven't got an IRA right now. And the job situation stinks so much there's no way to put anything away."

Support for personal accounts is higher among young adults and declines steadily as people get older, the poll found.

"I think it does need to be on a more private and personal basis," said Kevin Settles, a 24-year-old Republican from Eastman, Ga. "You should have a decision on how your money is handled."

People were about evenly divided on whether investing Social Security taxes in the stock market or in bonds would give them more or less money. Established investors were more likely than non-investors to think investing some of their Social Security taxes in the stock market would give them more money.

Larry McHugh, a school administrator from Philadelphia, said he would love the personal accounts plan if he were in his mid-20s — but he's 54 and has "been paying into it at the maximum rate for almost three decades." Bush's plan won't solve the financial problem facing Social Security "but will compound it," McHugh said.

Some other poll findings:

  • One in five hope to retire at 55 or younger, nearly half plan to retire in their 60s and 10 percent say they will retire at 71 or older or never retire.
  • About two-thirds of current workers plan to keep working after they've retired — for a variety of reasons. Some want to make enough money to make ends meet; others want money for extras or just a way to stay busy.
  • Half of those polled said they have a 401(k) retirement plan, and almost that many said they have individual retirement accounts and employer-paid pension plans — indicating some people have a combination of the three.

    Nineteen-year-old Robin Calhoun, a college student from Poteet, Texas, said she's eager to get a chance to start her own account with Social Security taxes because "you can put however much you want into it." But she doubted whether the accounts will become law: "I think it's going to end up getting caught in politics."

    The AP-Ipsos poll of 1,000 adults was conducted Feb. 22-24 and has a margin of sampling error of plus or minus 3 percentage points.
    By Will Lester