Survey: Retirement Confidence Recovers for Those With Retirement Plans
The Employee Benefit Research Institute’s (EBRI) annual Retirement Confidence Survey found a marked increase in retirement confidence among workers with higher household incomes who also participate in one or more retirement plans — including defined contribution plans, defined benefit plans, and/or IRAs.
Specifically, more than half (55%) of survey respondents are now very or somewhat confident about having enough money to live comfortably in retirement. The number of workers who are “very confident” rose from 13% in 2013 to 18% this year, while 37% said they were “somewhat confident.” The number of workers who are “not at all confident” stayed statistically unchanged from last year at 28%.
Confidence Tied to Retirement Plan Participation
Not surprisingly, the level of worker confidence seems to have a direct correlation to retirement plan participation. Commenting on the trend in a press release, Jack VanDerhei, research director at EBRI said, “workers reporting they or their spouse have money in a defined contribution plan or IRA or have a defined benefit plan from a current or previous employer are more than twice as likely as those without any of these plans to be very confident (24% with a plan vs. 9% without a plan).”
In keeping with past results, current retirees’ confidence in their ability to have a financially secure retirement exceeds worker confidence levels, with 28% saying they are very confident, up from 18% in 2013.
Debt: A Major Obstacle to Saving
Citing reasons why they are not saving (or not saving more) for retirement, workers pointed to their current level of debt as a key obstacle. Among those who indicated debt was a problem for them, just 3% said they were very confident that they would have enough money to live comfortably throughout retirement, compared with 29% of workers who said that debt was not a problem for them. Overall, 58% of workers and 44% of retirees reported having issues with debt.
Other Survey Findings
Among the other findings in this year’s survey:
Worker confidence in their ability to pay for various aspects of retirement has increased. More workers are “very confident” (29%, up from 25% in 2013) in their ability to pay for basic living expenses. In addition, the percentage of workers who are “not at all confident” about their ability to pay for medical expenses declined (24%, down from 29% in 2013), as did the percentage who were concerned about paying for long-term care services (32%, down from 39% in 2013).
Most workers have not done a retirement needs calculation. Just 44% of workers have tried to determine how much they will have to have saved by the time they retire in order to live comfortably in retirement. This statistic has remained relatively unchanged for the past decade.
Workers are far more likely to say they will work for pay in retirement than retirees actually work. Far more than half (65%) of current workers expect to work for pay after they retire, while in reality, just 27% of today’s retirees actually are working for pay.
Few workers seek financial advice. Just 20% of workers report than they have obtained financial advice from a professional. Of those who did consult with a pro, 27% said they followed all of the advice, 36% followed most of it, and 29% followed some of it.
For more in-depth analysis of the study, visit the Employee Benefit Research Institute’s website.
Source: Employee Benefit Research Institute press release, “EBRI’s 2014 Retirement Confidence Survey: Confidence Rebounds–for Those With Retirement Plans,” March 18, 2014.