Beyond five years into retirement, boomer confidence plummets

However the level of comfort varies based on time. Five years beyond retirement, 55 percent of workers with DB plans are very confident of having enough resources to live comfortably – 38 percent of those with only DC plans say the same. When looking at 15 years out, only 26 percent of workers with DB plans remain very confident, nearly double the level of workers with DC-only plans (14 percent). And, 25 years out, the numbers drop even more significantly.

As for the overall age group, beyond 15 years into retirement, less than 20 percent think they will have sufficient resources to live comfortably. That percentage was at 34 percent in 2007.

“It’s not surprising that DB plans offer workers more confidence, but fewer workers will be covered by them in the years ahead,” said Jamie Knopping, senior retirement consultant at Watson Wyatt. “The pendulum is swinging toward 401(k)-only environments right now, but if employers find workers’ lack of retirement security creates issues relating to workforce transitions and reduced productivity, it may swing back to a middle ground. Account-based cash balance plans, for instance, offer features of both DB and DC plans, yet do not pose the same level of risk or cost for employers.”