Among those still employed, confidence that they will live comfortably throughout retirement slipped by 1 point to 67 percent in the latest annual survey by the Employee Benefit Research Institute. Image: shurkin_son/Shutterstock.com
By: FEDweek StaffA measure of retirement confidence shows an increase from 74 to 78 percent over 2024 in an overall measure, although amid concerns about potential changes to Social Security and Medicare systems and the impact on their savings of inflation and financial market volatility.
Among those still employed, confidence that they will live comfortably throughout retirement slipped by 1 point to 67 percent in the latest annual survey by the Employee Benefit Research Institute.
It said that seven in 10 retirees say they’re living the retirement lifestyle they envisioned, and nearly four in five agreed that they are able to spend money how they want within reason. However, “almost half agree at least somewhat that they spend less than they could because they are worried about running out of money. In addition, more than half of retirees describe their overall spending as ‘as expected’ or less,” it said.
“The share of retirees reporting their lifestyle in retirement is better than expected dropped (though not significantly), with about a quarter agreeing with this statement. Things aren’t necessarily worse, however, as most say their lifestyle is about the same as expected. A bigger share of retirees also finds overall expenses as expected compared with last year, when they found expenses to be higher than expected,” it said.
However, 71 percent of retirees and 79 percent of workers said they are at least somewhat concerned about changes to retirement programs. “The concern about Social Security is especially prominent, as almost all retirees say that Social Security is a source of retirement income, and nearly as many workers expect Social Security to be an income source when they retire,” it said.
“In addition, workers are concerned about inflation negatively impacting their ability to spend as well as the volatility of the stock market. Not only are workers concerned about having to cut their spending, but they are also concerned that the higher costs will reduce their ability to save as much as they want . . . About 7 in 10 workers are worried about making substantial cuts to spending because of inflation, the stock market being volatile and housing costs rising,” it said.
One response was that two in 10 workers last year changed their expected retirement date, most of them to delay it. “While the median expected retirement age for workers has held steady at 65 years old, a growing share reports they plan to retire at 70 years old or beyond,” it said.
Those expectations may be unrealistic in many cases, however. Three in five retirees said they retired earlier than they had expected, with a median retirement age of 62.
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