The annual survey of the confidence American workers have in their ability to retire “comfortably” paints a pessimistic and bleak future for the millions of Boomers reaching traditional retirement age in the coming years. The Employee Benefit Research Institute (EBRI) national survey of retirement confidence levels has tracked workers for 22 years, and the 2012 findings are historic lows. Only 52 percent of workers are “somewhat” or “very” confident about having enough money to “live comfortably throughout” their retirement years. That’s down from 70 percent in 2002.
What’s worse is that some 60 percent, an all-time high, report they have less than $25,000 in savings or investments, beyond the value of their home and any defined benefit plans. Planners and local governments need to begin preparing now for a large percent of their senior population to not be able to retire. That means an older workforce, more older people commuting daily to work, and among those who are not able to keep working, more low income or no income seniors who will require help.
The current mindset of workers is that they don’t have enough money saved, but the answer for most seems to be not to try to save more money, but to plan on continuing to work beyond traditional retirement age. Only 18 percent planned to retire after age 65 in 2002. That figure is 37 percent today. Yet more than one-half of current retirees say they had to stop working because of unexpected issues: health, disability, or company closing or downsizing.
Other highlights include:
- Confidence about having enough money to pay for medical and long-term care expenses in retirement remains far below confidence levels about covering basic living expenses.
- Confidence levels about retirement have stagnated because workers are concerned about other things – 42 percent cite “job uncertainty” as their top economic issue, but only 2 percent say that saving for retirement is a top issue (page 11).
- Some 70 percent of current workers report they plan to “work in retirement,” but in reality today about one in four retirees work for an income (page 26). This indicates a significant shift in expectation, and a potential gap in the coming reality.
The annual EBRI survey is worth a close look in order to stay on top of current thinking among workers and retirees. Attitudes about “retirement” are changing and this report provides an up-to-date perspective.
How to Use
Planners and government officials should review this report annually. Clearly, the findings suggest that community planners should support initiatives that encourage saving for retirement and educating future generations about the benefits of saving for retirement.
View full report: The Retirement Confidence Survey – 2012 (PDF – 1.5 MB)