Worker confidence about having enough money to live comfortably in retirement remained relatively stable in 2016, with 21% of workers saying they felt very confident, according to a poll released Tuesday by the Employee Benefit Research Institute.
This represented a one percentage point slip from last year’s survey, but was well ahead of the low confidence level of 13% recorded in 2013.
Workers who were somewhat confident about their retirement prospects increased from 36% in 2015 to 42% in 2016, while the percentage of those not at all confident decreased from 24% to 19%.
EBRI also reported that preparations to save for retirement still lagged.
EBRI and Greenwald and Associates conducted the survey from Jan. 2 to Feb. 3 through 20-minute telephone interviews with 1,000 workers and 505 retirees age 25 and older in the U.S.
The report said workers’ retirement confidence was strongly related to retirement plan participation/ownership.
Twenty-six percent of workers who reported that they or their spouse had money in a defined contribution plan or individual retirement account or had benefits in a defined benefit plan from a current or previous employer were very confident about their financial security in retirement, compared with 10% without a plan.
But 38% of workers without a plan said they were not at all confident, versus 11% with a plan.
“Among those who are confident about retirement, it’s overwhelmingly among those who have a retirement plan,” Jack VanDerhei, EBRI research director and co-author of the 2016 study, said in a statement.
“Even if you control for discrepancies in age and income, the likelihood that a respondent is either somewhat or very confident that they will have enough money to live comfortably throughout their retirement years is 22 percentage points higher for those who have an IRA, DC plan and/or DB plan than their counterparts without a retirement plan.”
About a fifth of respondents who knew they were saving less than they would need for retirement said they would have to save more later, while 15% said they would have to work in retirement and 14% said they would have to retire later — even though many retirees reported that they had been forced to leave the work force earlier than planned, some because of health problems or disability.
Eighty-three percent of workers without a retirement plan reported that the total value of their household’s savings and investments, excluding the value of their primary home and any DB plans, was less than $10,000.