Survey results show worker confidence in being able to retire comfortably this year has plummeted to a new low at 13 percent. Analysis from the 19th annual Retirement Confidence Survey bolsters growing evidence that retirement security is quickly deteriorating.
Only 20 percent of respondents believe they will be financially secure in retirement - a 21 percent drop from 2007. Dr. Mathew Greenwald, contributing columnist for Boomer Market Advisor and president of Mathew Greenwald & Associates (which co-conducted the survey with the Employee Benefit Research Institute), says many boomer clients do not have a good idea of what's really needed for retirement.
"Most clients cannot formulate the most effective strategy for themselves to optimize both life satisfaction and retirement security," Greenwald writes in the April 2009 issue of Boomer Market Advisor. Survey results support this notion, showing only 44 percent of workers and/or their spouses have tried to calculate how much money they will need to have saved for retirement. And an equal proportion - 44 percent - aren't factoring in anything; They're just guessing.
Retirees are slowly waking up to what amounts to "a huge gap between what people think it's going to take to retire comfortably and what it actually takes," Jack VanDerhei, a survey co-author and research director at EBRI tells the Wall Street Journal. With 49 percent of people 55 and older having saved less than $50,000, many people will be forced to settle for a "much lower standard of living in retirement than what they had hoped for," he says.
Not surprisingly workers anticipate they will need to work longer to solidify their financial security; 89 percent of respondents say they will postpone retirement, but the survey gave no time frame for how long they intend to work past retirement age. Nevertheless, findings show, the median worker expects to retire at age 65, with 21 percent planning to push on to their 70s.
Medical expenses are adding to the crashing optimism; Only 13 percent feel very confident about having enough to pay for health costs in retirement.
How workers are responding:
- 81 percent have reduced expenses
- 43 percent are changing the way they invest their money
- 38 percent are working more hours or have a second job
- 25 percent are saving more money
- 25 percent are seeking advice from a financial professional
Read survey highlights here.
RCS Fact Sheet: Retirement Expectations
RCS Fact Sheet: Reactions to the Slow-Down
RCS Fact Sheet: Saving for Retirement
RCS Fact Sheet: Age Comparisons
RCS Fact Sheet: Gender Comparisons
RCS Fact Sheet: Health Care Costs in Retirement
RCS Fact Sheet: Social Security/Medicare Attitudes