Retirement confidence resilient despite pandemic

The annual EBRI survey underscores workers' and retirees' optimism about the outlook for Social Security and Medicare.

Despite a global pandemic, the majority of workers and retirees are more optimistic about their ability to live comfortably throughout retirement than before the Covid-19 outbreak began, according to the 2021 Retirement Confidence Survey released Thursday.

The 31st annual Retirement Confidence Survey of more than 3,000 Americans, equally divided between workers and retirees, was fielded twice last year: Once in January before the Covid-19 outbreak and a supplemental survey in March allowing for comparisons during the pandemic. The RCS survey, conducted by the Employee Benefit Research Institute and Greenwald Research, is the longest-running survey of its kind.

Despite the challenges of 2020, 8 in 10 retirees report that their overall lifestyle is as expected or better than expected. The results are virtually identical to those measured in January 2020 before the pandemic began.

“Retirees’ top priorities for discretionary spending in retirement continue to be travel and spending on leisure or entertainment,” said Lisa Greenwald, CEO of Greenwald Research and co-author of the report. “Many of these activities were curtailed during the pandemic, perhaps leading to lower spending and that is one reason why we may be seeing these results.”

“Another is the adaptability and resilience of retirees demonstrated throughout the RCS’ history,” Greenwald added. “The survey shows retirees prioritize asset preservation and do not like the idea of spending down.”

Social Security, a major source of income for more than 6 in 10 retirees, continued uninterrupted during the pandemic. Confidence that Social Security will continue to provide benefits of at least equal value to those received today reached an all-time high among both retirees (72%) and workers (53%).

In addition, 3 out of 4 retirees and nearly 6 out of 10 workers are confident that Medicare will continue to offer benefits of at least equal value to those received today — the highest level since the Retirement Confidence Survey was first fielded 31 years ago.

Nearly three-quarters of workers (72%) remain optimistic about their ability to retire comfortably, up three percentage points from last year. However, 3 out of 10 workers says the pandemic has negatively impacted their ability to save for retirement as a result of reduced hours or income, or job changes.

Workers continue to report a median expected retirement age of 65, while retirees report they stopped work at a median age of 62. This difference between workers’ expected retirement age and retirees’ actual age of retirement suggests that a considerable gap exists between workers’ expectations and retirees’ experiences.

Over the past three decades, the RCS has consistently found that a large percentage of retirees leave the work force earlier than planned, often as a result of factors beyond their control, such as declining health or a changing job situation.

More than 20% of workers said their target retirement age has changed since the Covid-19 pandemic began. More say that they now plan to retire later (17%) than those who say they now plan to retire earlier (6%).

Among those who plan to retire earlier, Covid-related reasons are often citied, including changes at their company, risks associated with work or someone in their household who had an issue related to Covid. However, other reasons to retire earlier were also cited, including the ability to afford to retire earlier than they had planned.

In addition, 72% of workers plan to work for pay in retirement compared with just 30% of retirees who report they have worked for pay in retirement. Among retirees who are working for pay, most say they work to stay active or because they enjoy working. However, financial reasons often play a role, such as wanting money to buy extras or to avoid reducing their savings.

While almost all retirees (92%) report that Social Security provides a source of retirement income, workers continue to expect to draw their retirement income from a wide variety of sources, including part-time work, retirement savings plans, IRAs, and personal savings and investments. Half of current workers expect to receive income from an annuity.

In contrast to workers’ expectations, retirees are less likely to rely on any form of personal savings or on employment for their income in retirement, demonstrating how retirement income planning will continue to evolve for succeeding generations.

(Questions about Social Security rules? Find the answers in Mary Beth Franklin’s ebook at

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