Retirement confidence as measured by the Employee Benefits Research Institute is at an all-time low, with just 14 percent of workers very confident they will have enough money to live comfortably in retirement—down from 27 percent in 2007—and workers also expressing concern about having enough money for expenses such as medical costs and long term care.
Another 38 percent said they were somewhat confident of having a comfortable retirement (down from 43 percent five years ago) and 23 percent said they were not at all confident. The rest were “not too confident.”
All but 28 percent said they were somewhat or very confident that they could cover their basic expenses in retirement but the total of those who could not say even that was up by 10 percentage points over that time.
One reason for lack of confidence is lack of savings. Only two-thirds say they have any retirement-oriented savings, down from three-fourths in 2009 and suggesting that many people have had to use their retirement savings for other purposes. Sixty percent of those surveyed said the total value of their savings and investments, apart from the value of their home, is below $25,000; 30 percent said they have less than $1,000 in total savings.
And one result is an expectation of needing to work longer. In 1991, only 11 percent of workers said they expected to still be working past age 65, but that figure is now 37 percent.
The report also showed the effects of the decreased availability in the private sector of defined benefit plans such as the civil service CSRS and FERS annuities. Only 56 percent said they expected to receive such a benefit, either through their own employment or a spouse’s work. The same percentage, though said they had not even tried to calculate how much money they will need to save by retirement to live comfortably in retirement.
