Putnam: Workers need to save more for retirement

Globe Staff

Americans are less likely to fully fund their individual retirement accounts this year, in some cases because they lack the cash, according to a new survey from Putnam Investments, a Boston mutual funds company that offers retirement planning services.

Almost 40 percent fewer Americans expect to fully fund their IRAs this year than they did in 2009, and the survey of 1,000 Americans found that there is much confusion and uncertainty about IRA investing.

Besides a lack of cash, respondents cited a preference for keeping money available for other purposes and concerns about risk as reasons for not fully funding retirement accounts, the survey said.

While a recent rule change makes more Americans eligible to open Roth IRAs, 41 percent of survey respondents think they will have more money in the long run if they pay taxes later with a traditional IRA rather than converting to a Roth IRA and paying taxes now.

"The economic turmoil of recent years has made clear to Americans the uncertainty of their prospects for a secure retirement. Jeffrey R. Carney, head of retirement and global products at Putnam Investments, said in a statement. "They understand the need to save more, but are finding it difficult to do so, leaving them with a significant retirement income gap. "Government, employers, and the financial services industry need to continue to find new strategies to help workers increase their retirement savings through education, guidance, and retirement income tools. Americans need to make the most of their IRAs, 401(k) plans, and other savings vehicles that are built to provide significant contributions to their lifetime income."