The Employee Benefits Research Institute (EBRI) has been tracking American workers' confidence in being able to afford a comfortable retirement for 18 years. This year, EBRI's Retirement Confidence Survey results show that this level of confidence has dropped precipitously from 2007, reflecting "the biggest one-year drop" in the history of the survey, EBRI reports.
In this year's survey, just 18% of workers were "very confident" about having enough money for a comfortable retirement, a drop from 27% in 2007. Meanwhile, the percentage of workers who are "not confident" about having enough money for medical expenses rose from 32% in 2007 to 43% in 2008. And more than half (54%) are "not confident" that they will have enough money for long-term care expenses, a 10% increase from last year.
EBRI reports that confidence dropped "across all age groups and income levels but was particularly acute among younger workers and those with lower income." For example, just 16% of workers ages 35-44 are "very confident" about having enough money for a comfortable retirement, down from 28% in 2007 Meanwhile, just 5% of workers with household income under $35,000 were "very confident (down from 14%) as were just 13% among with income of $35,000$74,999 (down from 25% from 2007)..
"In the nearly two decades we have been conducting the RCS, this year's results show a very dramatic reduction in the public's confidence about having a comfortable retirement. The economy and health costs are major concerns," said EBRI president Dallas Salisbury, in a press release. "If there is a silver lining, it's that Americans finally may be waking up to the realities of being able to afford retirement."
The survey notes that 47% of workers say that they have tried to calculate how much money they will need for a comfortable retirement--a figure that's increased significantly since "the low point" of 29% in 1996. A little less than half (44%) of those who calculated how much they will need changed their retirement planning, and of those, 59% started saving or investing more, according to EBRI.
The survey also asked what concerns about the present are preventing workers from thinking about or planning for retirement. Some of the reasons cited as the "most pressing concern" among workers were "making ends meet or the cost of living" (by 17% of workers); "paying for health insurance or medical expenses" (16%); "making mortgage payments or paying for housing" (13%), and paying down debt or loans (13%).
Source: EBRI (www.ebri.org)