The 7 Cities Where Americans Are Least Prepared For Retirement

Photo: Flickr via garryknight

Each year, Ameriprise Financial’s New Retirement Mindscape 2012 City Pulse index surveys more than 10,000 consumers in the 30 largest U.S. metros to gauge just how consumers are feeling about their shot at retirement. Judging from this year’s results, it’s clear a still-recovering economy has not only hindered Americans’ ability to plan for the future, but has done a number on their confidence in retiring at all.

“Consumers are feeling much less prepared than they have in the prior three years [that we’ve conducted the study], down from 75 per cent to 70 per cent this year,” Suzanna de Baca, vice president of wealth strategies, told Business Insider. “When you look at our sample size, that’s a statistically significant change.”

For the most part, it comes down to basic dollars and cents. More Americans are struggling to save for retirement and fewer have decided exactly how much they’ll need to survive their golden years. 

“It’s not just enough to be thinking about retirement,” de Baca said. “Short-term economic swings can have a big impact on confidence. You really need to take some positive steps [towards retirement planning], regardless of the environment.”

From the list of 30 metros, we’ve highlighted the seven lowest ranking.

7. Cleveland

Preparation ranking: 26/30
Confidence ranking: 22/30

Chalk Cleavland's lower ranking up to anxiety over future healthcare costs (31%) and potential changes to Social Security (24%).

They cited these two reasons as the most likely road blocks to their retirement goals. The region also lives up to its reputation as a litmus test for national voter sentiment.

Its scores on positive and negative sentiments were right on par with national averages, the report found.

Rankings of the U.S.'s 30 largest metro areas by Ameriprise Financial.

6. Baltimore

Preparation ranking: 30/30
Confidence ranking: 24/30

Baltimore residents can't seem to get on a steady retirement track. Just 73 per cent have begun retirement preparations, down 7 points from last year and a full 13 points lower than 2010.

'In particular, locals are less likely than people across the U.S. to say they're making plans to spend more time with family (30% vs. 40%) or determining how they'll rest and relax (17% vs. 24%),' the report found.

What's more, the 23 per cent of locals who've delayed retirement blame job loss or setback (37%), health (33%), lack of savings (27%) and loss of equity in their home (13%).

Rankings of the U.S.'s 30 largest metro areas by Ameriprise Financial.

5. New York

Preparation ranking: 24/30
Confidence ranking: 26/30

New York City is no stranger to the bottom five and its inhabitants are even further behind in their retirement plans this year.

They're eight points behind the 70 per cent of Americans who've started retirement planning and a full 12 per cent fewer New Yorkers have started saving.

The number of residents taking advantage of employer-sponsored retirement plans also dropped, from more than half to just 40 per cent.

A bright spot: Fewer people feel negatively about retirement than last year, 30 per cent vs. 41 per cent.

Rankings of the U.S.'s 30 largest metro areas by Ameriprise Financial.

4. Chicago

Preparation ranking: 20/30
Confidence ranking: 27/30

Some dire findings from the report: Fewer Chicagoans say they are setting aside money for retirement (65% vs. 70%) or contributing to an employer-sponsored plan (47% vs. 53%) compared to 2011.

But where Ameriprise says they're truly failing is estimating how much they'll need to get by in retirement. Just 16 per cent have a figure in mind, versus 29 per cent last year.

Planning appears to be the issue. They've seen a 10 per cent drop in the number of residents seeking professional financial planning assistance over last year and their confidence levels have dropped as a result----just 10 per cent feel ready to retire.

Rankings of the U.S.'s 30 largest metro areas by Ameriprise Financial.

3. Indianapolis

Preparation ranking: 21/30
Confidence ranking: 28/30

Indianapolis locals may be more likely than the average American to set aside money for retirement (69% vs. 63%), but student loan debt is a thorn in their side.

'They are more likely ... to say student loans are impacting their current financial situation (21% vs. 14%),' the report says, and 'one-third of those who share this concern say it's because they've assumed payments on loans they co-signed for a child or grandchild who is currently unable to make payments.'

They are also more unsure of where they'll retire than the rest of the nation (18% vs. 24%).

Rankings of the U.S.'s 30 largest metro areas by Ameriprise Financial.

2. Charlotte

Preparation ranking: 25/30
Confidence ranking: 29/30

Falling behind big metro neighbours like Atlanta, Nashville, and Raleigh, Charlotte's high unemployment rate has done a number on the locals' retirement confidence.

Per the report: 'Compared to previous years, the number of metro area residents who say they are setting aside money in an employer sponsored plan (53%), determining the income they'll need for retirement (21%) or consulting with a financial advisor (22%) have all declined since 2010.'

They've also seen a 12-point drop in those who feel optimistic about their retirement plans, from 42 per cent last year to 30 per cent in 2012.

Rankings of the U.S.'s 30 largest metro areas by Ameriprise Financial.

1. Washington D.C.

Preparation ranking: 27/30
Confidence ranking: 30/30

Time has done a lot to change the retirement plans of D.C. residents. Eight in 10 said they were preparing for retirement in 2010, which has fallen to just 68 per cent this year.

'Those who report setting aside money in their own savings in investments (50%), determining how much they need to save for retirement (17%) and consulting with a financial advisor (22%) also declined during this period,' the report says.

The result? A near 50 per cent loss in confidence, which dropped from 21 per cent to 12 per cent and earned them the top spot as least prepared for retirement.

Rankings of the U.S.'s 30 largest metro areas by Ameriprise Financial.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.