Despite the improving economy and strong stock market, Americans' confidence in retiring comfortably has stayed low, with only 13% of workers very confident that they will have enough money in retirement.
Despite the improving economy and strong stock market, Americans’ confidence in retiring comfortably has stayed low, according to a survey, with only 13% of workers very confident that they will have enough money in retirement.
The Employee Benefit Research Institute’s 2013 Retirement Confidence Survey reveals that many workers might have such low confidence because they realize just how much they need to secure a comfortable retirement.
“Others reasons may include more immediate financial concerns about job uncertainty and debt as well concerns about the cost of retirement,” wrote authors Ruth Helman, Nevin Adams, JD, Craig Copeland, PhD, and Jack VanDerhei, PhD. “Nevertheless, worker savings remain modest, and less than half appear to be taking basic steps needed to prepare for retirement.”
2011 marked a year of record lows for confidence and the number was essentially unchanged in this year’s survey. Respondents were split with half expressing some level of confidence and half admitting they were not confident. More than a quarter (28%) was not at all confident, which was up from 23% in 2012.
Although respondents cited large savings targets for how much they believe they need to save to achieve a financially secure retirement (23% said they need to save at least 30% of their income each year), less than half (46%) admitted that they and/or their spouse have actually tried to calculate how much money they need to save.
Just 57% of workers reported that they and/or their spouse are currently saving from retirement, which is down from 65% in 2009.
In 2008 just 26% of retirees were confident that they had done a good job preparing for retirement (down from 39% in 2007) and the number has remained statistically unchanged since then.
“Although one might expect that American workers would respond to their lack of retirement confidence by improving their preparations, that does not appear to be the case,” the authors wrote.
Read the full report here