Workers are feeling confident about being able to pay for their basic expenses in retirement. But they're far from secure as more of them say they have hardly anything in savings and investments.
Workers are feeling confident about being able to pay for their basic expenses in retirement, but they are far from secure as more of them say they have hardly anything in savings and investments.
In a survey conducted by the Employee Benefit Research Institute, just 16% of polled workers said that they are “very confident” about their retirement income. That is about the same response that EBRI got when it ran a similar survey last year.
Also of note: A mere 19% of the retirees polled said that they are “very” confident about having sufficient money to live comfortably through their retirement years.
Nearly 40% of the retirees say that they aren’t confident about having enough money, which is up from 32% last year and 34% in 2008.
The participants’ sentiments appear to be in tune with the market, said Craig Copeland, EBRI senior research associate.
“The stock market has improved, unemployment has leveled off, and you see a little bit of growth in the economy,” he said. “It’s not so much that they don’t feel better; rather, they don’t feel worse, and that has a lot to do with the economy.”
Although workers’ attitudes on having enough money to get by appeared to be holding steady between 2009 and this year, their finances don’t seem to be getting any better.
Fewer of them are saving, for instance. Just 69% of the polled workers said they and/or their spouse had saved for retirement in 2010, down from 75% last year.
Nearly 30% of all respondents said that they haven’t saved any money for retirement, citing that they couldn’t afford to save. Workers and retirees also pointed to numerous other reasons, including the misconception that they had plenty of time to save, having other priorities and being ignorant and uninformed about retirement planning.
“A lot of people didn’t have increases in their salary, so they had to dip into their savings, or they were unable to add to their savings because they could only cover their expenses,” Mr. Copeland said. He added that historically, about a fifth of the participants have had essentially nothing saved up, a function of those individuals persistently being low earners.
Among the 902 workers surveyed, 54% said that the total value of their household savings and investments — exclusive of their primary home and defined-benefit plans — is less than $25,000. Another 27% said that they have less than $1,000, up from 20% in last year.
Just 11% of those polled said they had at least $250,000 in household savings.
Despite coming up woefully short in the way of savings, just 46% of the workers have actually calculated how much they need to scrimp in order to have a comfortable retirement.
EBRI conducted phone interviews in January with 902 individuals over 25, including 251 retirees. The survey was performed in conjunction with Mathew Greenwald and Associates Inc.
