| Home |
Articles | Only 13% of Workers Say They Are Very Confident of Having Enough Money to Live Comfortably in Retire . . .
|
Only 13% of Workers Say They Are Very Confident of Having Enough Money to Live Comfortably in Retirement, Study Reveals
April 14, 2009
|
Delaying your retirement plans?
The Federal Resume Guidebook provides
comprehensive, in-depth guidance on how to craft the perfect federal application
to change jobs or get promoted. The new 4th Edition gives detailed advice on how
to navigate and make the most out of USAJOBS and other online application
systems
Learn more
here
|
|
The recession has cast a shadow over the retirement expectations of the vast
majority of Americans, leaving a record-low 13 percent this year able to say
they are very confident of having enough money to live comfortably in
retirement, according to a survey released today by the nonpartisan Employee Benefit Research Institute (EBRI).
Among workers, those feeling very confident about retirement has tumbled by
one-half in the last two years.
Because of the economic downturn, many workers say they expect to work
longer, the survey found, and more workers say they are planning to supplement
their income in retirement by working for pay.
Not surprisingly, workers overall who have lost confidence over the past year
about affording a comfortable retirement most often cite the recent economic
uncertainty, inflation, and the cost of living as primary factors, the RCS
reported. In addition, negative experiences such as job loss or a pay cut, loss
of retirement savings, or an increase in debt, almost always contribute to loss
of confidence among those who experience them.
Overall, the percentage of workers very confident about having enough money
for a comfortable retirement continued a two-year decline, falling to 13 percent
this year, down from the previous low of 18 percent in 2008 and 27 percent in
2007. This is the lowest since the question was first asked in the survey in
1993 and represents a 50 percent decline in worker confidence since 2007. Among
current retirees, confidence in having a financially secure retirement also
dropped this year to a new low, with only 20 percent saying they are very
confident; that's down from 29 percent in 2008 and 41 percent in 2007.
"Our survey first picked up the drop in retirement confidence last year,"
said Jack VanDerhei, research director at the Employee Benefit Research
Institute, co-sponsor of the survey with Mathew Greenwald & Associates, a
survey research firm. "Given the uncertainties that exist about economy, it is
no surprise the downward trend has continued. By any measure, the two-year
results amount to a very significant drop in workers' and retirees' confidence
in their retirement prospects."
Expected Retirement & Working in Retirement
The survey made two significant findings concerning workers' expected
retirement date and work in retirement:
- Workers apparently expect to work longer because of the economic downturn:
28 percent of workers in the 2009 survey say the age at which they expect to
retire has changed in the past year. Of those, the vast majority (89 percent)
say that they have postponed retirement with the intention of increasing their
financial security. Nevertheless, the median (mid-point) worker expects to
retire at age 65, with 21 percent planning to push on into their 70s. The median
retiree actually retired at age 62, and almost half of retirees (47 percent) say
they retired sooner than planned.
- More workers are also planning to supplement their income in retirement by
working for pay: The proportion of workers planning to work after they retire
has increased to 72 percent in 2009 (up from 66 percent in 2007). This compares
with 34 percent of retirees who report they actually worked for pay at some time
during their retirement.
Meeting Expenses in Retirement
The survey includes a wealth of other findings about attitudes toward
retirement. For example, workers who say they are very confident in having
enough money to take care of basic expenses in retirement dropped to 25 per-cent
in 2009 (down from 40 percent in 2007), while only 13 percent feel very
confident about having enough to pay for medical expenses (down from 20 percent
in 2007). Among retirees, only a quarter (25 percent, down from 41 percent in
2007) feel very confident about covering their health expenses
Other key findings:
- Cutting back, working more: Among workers who have lost confidence in their
ability to secure a comfortable retirement, most (81 percent) say they have
reduced their expenses, while others are changing the way they invest their
money (43 percent), working more hours or a second job (38 percent), saving more
money (25 percent), and seeking advice from a financial professional (25
percent). Among all workers, 75 percent say they and/or their spouse have saved
money for retirement, one of the highest levels ever measured by the RCS.
- Little planning for retirement: Many workers still do not have a good idea
of how much they need to save for retirement. Only 44 percent of workers report
they and/or their spouse have tried to calculate how much money they will need
to have saved by the time they retire--and an equal proportion (44 percent)
simply guess at how much they will need for a comfortable retirement.
- Retirement contributions/savings: A large majority of workers participating
in a work-place retirement savings plan (72 percent) state that they have not
changed the percentage of their salary contributed to the plan in the past year.
However, 18 percent say they increased the percentage contributed and 11 percent
decreased the percentage. Of the 22 percent of workers eligible to contribute to
an employment-based retirement plan but not doing so, only 1 in 5 reported that
they had been contributing before October 2008. This translates into less than 5
percent of eligible workers, indicating that the economic downturn did not cause
many eligible workers to stop contributing to their work-place retirement
savings plan.
About the Study
The 2009 Retirement Confidence Survey was conducted in January 2009 through
20-minute random digit telephone interviews with 1,257 individuals age 25 and
older in the United States. The survey has a margin of error of plus or minus
three percentage points. The survey dates to 1991; questions about worker and
retiree confidence in having enough money for a comfortable retirement have been
asked consistently since 1993.
EBRI is a private, nonprofit research institute based in Washington, DC, that
focuses on health, savings, retirement, and economic security issues. EBRI does
not lobby and does not take policy positions. www.ebri.org
|
Overview - CSRS
