Most workers, retirees have retirement income confidence

New EBRI research sheds fresh light on sentiments around inflation, Social Security benefits, and use of guaranteed income products.

Despite a sharp decline in 2023, confidence among US workers and retirees regarding their retirement finances is showing signs of recovery, according to the latest findings from the 34th annual Retirement Confidence Survey.

The new survey by the Employee Benefit Research Institute and Greenwald Research polled 2,521 Americans, including 1,255 workers and 1,266 retirees.

“Overall, two-thirds of the workers and three-fourths of the retirees are very or somewhat confident about having enough money to live comfortably in retirement, which is unchanged from 2023,” Craig Copeland, director of Wealth Benefits Research at EBRI, said in a statement.

According to EBRI’s research, the feeling of retirement confidence spans across all age groups, with younger workers expressing notable optimism in some retirement aspects.

It also revealed a persistent concern about potential government changes to the American retirement system.

“Workers and retirees are also concerned that their retirement could be impacted by the US Government making changes to the American retirement system. In fact, 79 percent of workers and 71 percent of retirees have this concern,” said Lisa Greenwald, CEO of Greenwald Research.

Inflation continues to be a significant worry for US adults, with 28 percent of workers and 32 percent of retirees who weren’t confident in their retirement prospects citing it as the reason. For another 39 percent of workers and 27 percent of retirees who lacked confidence, lack of savings was the issue.

The survey also showed Social Security as the top source of actual and expected retirement income among American adults, including 88 percent of workers and 91 percent of retirees. But while only 35 percent of workers said they expected it to be a major source of income in retirement, 62 percent of retirees said they actually rely heavily on Social Security for income.

EBRI’s research also shed light on retirement age expectations and realities. Workers anticipate retiring at a median age of 65, aligning with historical expectations. However, retirees report retiring earlier, with a median age of 62. Additionally, more workers now expect to continue earning in some capacity even after retiring.

When asked to estimate how much they’d need in retirement, one third of workers estimated they’d need at least $1.5 million – a number that’s recently been thrown into question. But many working Americans have a long way to go, with a third saying they have less than $50,000 in savings and investments, and 14 percent saying they’ve put away less than $1,000.

A new trend highlighted in the survey is the increasing interest among workers in retirement plans that offer guaranteed income products. Of those with access to a workplace retirement savings plan, one-third said having investment options that provide guaranteed lifetime income is the most valuable enhancement to the plan.

The appetite for guaranteed income was also clear and present for 83 percent of workers in a work retirement plan, who said they would be interested in putting at least some of their nest egg in a product that provides a steady stream of monthly payments.