Most Americans are very or somewhat confident about having enough money to live comfortably throughout their career, or at least they were before the rise of the coronavirus pandemic, found the 2020 Retirement Confidence Survey by the Employee Benefit Research Institute and Greenwald & Associates.
A subsequent survey done at the end of March showed some erosion of confidence, especially for those workers who had lost jobs due to the pandemic, which might be a harbinger of things to come.
Although the 2020 January survey found 69% of workers very or somewhat confident of financial security in retirement, that number dropped to 63% in late March. For those already retired, the pandemic didn’t seem to matter, as the very or somewhat confidence level was down slightly to 76% in March from 77% in late January. However, in 2019, that number for retirees was 82%.
The group also surveyed workers and retirees on other aspects of retirement, finding differences between January and March.
- In January, 75% of workers were very or somewhat confident of having enough money to cover basic expenses in retirement. But in March, that number dropped to 69%, of which the very confident workers dropped to 24% from 33%.
- Asked the same question in January, 81% of retirees were very or somewhat confident they would have enough money to cover basic expenses in retirement, which actually rose to 85% in March, the same amount as the previous year.
- Medical expenses were more of a question. For workers, 64% were confident they would have enough money to cover medical expenses in retirement, which dropped to 60% in March. Of those, very confident respondents dropped from 22% in January to 17% in March.
- Of retirees, in January, 70% believed they would have enough money for future medical expenses, a number that increased in March to 74%.
- Sixty-three percent of workers were very or somewhat confident they would have enough money to last the rest of their life, a number that fell to 57% in March.
- Retirees were more confident, with 27% very confident and 41% somewhat confident they would have enough money to cover their lifetime, a number that rose from 68% to 74% in March.
- Long-term care, such as nursing home or home care was more worrisome for workers, who were only 18% very and 36% somewhat confident they would have enough money to cover it. That amount dropped to 50% in March from 54% in January.
- Retirees experienced no drop in same in confidence level from January to March. In January 52% were very (15%) or somewhat (37%) confident of having enough money to cover long-term care.
Other findings included 67% workers very or somewhat confident in their preparations for retirement, a number that dropped to 64% in March.
Both workers and retirees were confident that Medicare benefits would continue at the same level. In January, 50%, up from 45% in 2019, of workers were very or somewhat confident, and that rose to 54% in March, while 66% of retirees (down from 72% in 2019 but up from 46% in 2018) were very or somewhat confident about Medicare, which actually rose to 71% in March.
And Social Security? In January, less than half or 48% of workers (vs. 68% of retirees) were very or somewhat confident that Social Security will continue to provide benefits at least equal in value to the benefits received by retirees today, which increased to 51% in March.
The study also looked at what workers thought of their workplace retirement plans, and 83% of them (down to 76% in March) were overall very or somewhat content with their company plans as well as the options available.