Savers feel the pinch

The immediate reality of higher energy and food prices is putting some Americans even further behind the eight ball when it comes to retirement savings, according to a new survey on consumer spending habits. While consumers at all levels are feeling the pinch of higher prices, the situation has become bleakest for those households with annual incomes of less than $25,000. More than three-quarters of the survey respondents in that income bracket said that, as a result of economic conditions, they had been forced to reduce or eliminate saving for retirement. "Rising food and energy prices have clearly affected Americans at nearly every income level," said Clif Helbert, retirement-planning principal at Edward D. Jones & Co. LP. The St. Louis-based brokerage firm sponsored the survey, which included interviews with 806 people who said they were actively saving for retirement. "Gas prices are unpredictable, but the need to save for retirement isn't," Mr. Helbert said. "As much as possible, we recommend keeping your retirement savings intact, even if that means sacrificing in other areas." More than two-thirds of respondents from households earning between $35,000 and $50,000 annually reported cutting back on their retirement saving, while 55% of all respondents said their retirement savings had been reduced. Among the highest earners in the survey (more than $75,000), 41% reported that they were saving and investing less. The survey also showed that women were more likely than men to reduce their retirement savings (58% versus 52%) and that those who live in the Northeast were trimming savings at the greatest rate. Sixty-three percent of those who live in the Northeast reported reductions, compared with 46% on the West Coast — the lowest percentage by region. The survey was based on 1,000 telephone interviews.