It Isn't Me - It's the Economy and My Low Pay; Allstate Survey Shows Americans Say They Save Well, Given Their Resources

The Allstate "Retirement Reality Check" survey measures Americans'attitudes about, and savings for, retirement.

Respondents in the 2005 survey also said they are financiallystretched, at least until the kids are out of college, and thatthey'll worry about saving closer to retirement day. But in themeantime, the majority of respondents insist that they are on top ofthings.

Specifically, when asked which statements describe them well,respondents said they are disciplined (87 percent overall), educatedabout investments (71 percent) and good savers (78 percent), accordingto the Allstate survey. Even 79 percent of those who said they "dread"retirement called themselves disciplined, as did 84 percent of thosewho are "apprehensive" about retirement.

That discipline extends beyond finances, survey respondents said.For example, the Allstate survey found that 75 percent of respondentssaid they spend more time solving problems, rather than worrying aboutthem. And 82 percent said they have, and stick to, a budget.

But at the same time, 56 percent of respondents said their savingsand investments, not including their home, total less than $100,000.And 53 percent said they have less than $75,000 in accounts earmarkedspecifically for retirement, such as Individual Retirement Accounts,401(k) plans, 403(b) savings, as well as taxable accounts.

And despite feeling they are good savers, 64 percent ofrespondents admit to feeling overwhelmed about how to finance theirretirement, and 58 percent say they worry they'll outlive theirretirement savings.

"This disconnect between people's attitudes and their actions is aclear reality check," said Casey Sylla, president, Allstate Financial,a business unit of The Allstate Corporation. "Our survey shows thatmany people view savings as beyond their control, but it is importantto take control of our own finances. People cannot afford to leaveplanning for retirement to external forces."

What triggers Americans to save?

In fact, the 2005 Allstate "Retirement Reality Check" survey showsthat external triggers are the most likely to prompt people to savemore. Many of the events that might be assumed to trigger savings,such as marriage or birth of a child, were deemed much lesssignificant to survey respondents.

By far the No. 1 savings trigger cited by survey respondents wasmaking more money. Overall, 84 percent said this, and it was the No. 1savings trigger regardless of age, income, education or gender.

The No. 2 savings trigger was getting closer to retirement, citedby 71 percent of respondents, and No. 3 was having children finishcollege, cited by 61 percent.

And 60 percent of survey respondents said that the economy needsto improve to allow them to save more.

"It is understandable that many people's first reaction is thatthey cannot save more unless they make more, because inflation isrising faster than many Americans' paychecks," said Mathew Greenwald,Ph.D., president of Mathew Greenwald & Associates, the Washington,D.C. firm that conducted the survey for Allstate.

The U.S. Labor Department's 2004 National Compensation Survey,released in September, reported that the average hourly wage rose 1.9percent between July 2003 and July 2004. During that same period,however, inflation rose by 3 percent, meaning the average wage-earnerlost actual buying power.

"Clearly some people's pay is increasing faster than inflation,while others are falling behind," Greenwald said. "The key point inthe Allstate 'Retirement Reality Check' survey is that peopleresponded that they can't save more unless they get a raise, even ifthey're already earning more than $150,000. That suggests that manypeople are more focused on spending than saving."

Among respondents from households with annual income of $150,000or more, 78 percent said they would save more if they got a salaryincrease. That compares with 84 percent of respondents from householdswith annual incomes of less than $55,000 who said that.

On the other hand, only 41 percent overall said that gettingmarried would prompt them to start saving for retirement, and 29percent said birth of a child would do that. In both cases, age ofrespondents was a significant factor

Priorities drive savings strategy

Among Generation X, those born from 1965 to 1978, more than half(55 percent) said marriage would prompt them to start saving forretirement, compared with only 32 percent of Baby Boomers, born from1946 to 1964. And 39 percent of Gen-Xers cited birth of a child,compared with 20 percent of Baby Boomers.

"It's clear that people are focused on current expenses, which isunderstandable. It's also logical that having a child increasescurrent expenses for parents. But waiting to save until retirement ison the horizon is unrealistic," Sylla said. "The key is to create asavings plan that addresses your future without shortchanging currentneeds. That means people have to prioritize needs and goals. The goodnews is that our survey shows people are emotionally prepared tosave."

According to the Allstate survey, most Americans say it "feelsgood" to save money. More than 90 percent of all respondents saidthis, regardless of age, gender, income, education or region of thecountry. And 93 percent overall said it is "important" to save forretirement.

"This again highlights the disconnect between how people feel andhow they act," said Greenwald. "It's as if people think it's enough tothink about saving, rather than following through with a solid plan.The reality is that we all have to work with the income we have andmake the choices that balance our current financial needs with theretirement style we desire."

Allstate created the fifth annual "Retirement Reality Check"survey in conjunction with Mathew Greenwald & Associates. Using arandom digit dialing methodology, Greenwald & Associates polled 1,601people born between 1946 and 1978, with household incomes of $35,000or more. Retirees were accepted with incomes of at least $20,000. Themargin of error (at the 95 percent confidence level) for the totalnumber of respondents in this study is +/-2.5 percent, +/-3.8 percentfor information specific to Gen Xers, +/-4.5 percent for Baby Boomers.

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The Allstate Corporation (NYSE:ALL) is the nation's largestpublicly held personal lines insurer. Widely known through the "You'reIn Good Hands With Allstate(R)" slogan, Allstate helps individuals inapproximately 17 million households protect what they have today andbetter prepare for tomorrow through approximately 13,600 exclusiveagencies and financial professionals in the U.S. and Canada. Customerscan access Allstate products and services such as auto insurance andhomeowners insurance through Allstate agencies, or in select states atallstate.com and 1-800 Allstate(R). Encompass(SM) and Deerbrook(R)Insurance brand property and casualty products are sold exclusivelythrough independent agents. Allstate Financial Group provides lifeinsurance, supplemental accident and health insurance, annuity,banking and retirement products designed for individual, institutionaland worksite customers that are distributed through Allstate agencies,independent agencies, financial institutions and broker-dealers.