Makin' Money

A bleak snapshot of America’s retirement future

Chris Farrell Mar 13, 2012

Americans share little confidence in their ability to afford a comfortable retirement.

The 22nd Retirement Confidence Survey by the Employee Benefits Research Institute and others is stagnant at historically low levels. A mere 14 percent of workers surveyed are very confident they will have sufficient resources to live well in retirement. It’s essentially the same low results of last year and 2009.  

Considering the economic turmoil of the past 5 years, America’s future retirees worry about jobs, debt, and financial insecurity. Job insecurity looms particularly large with 42 percent, who say job uncertainty is the most pressing financial issue.

Even more troublesome from a retirement planning point of view, the results show that the percentage of workers saving for retirement continues its gradual decline.


As you can see from the chart, workers currently saving for retirement peaked at 65 percent in 2009. The figure is now at 58 percent.

Many workers report they have virtually no savings or investments, according to the study. In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000. To put that somewhat differently, for many of these workers, retirement income means relying on Social Security payments. 

The little-to-no savings is also why many more workers have raised their expected retirement age. For example, in the 2012 survey, 37 percent of workers said they believed they would retire after age 65. In 1991, 11 percent of workers said they expected to retire after age 65. 

However, the retirement savings picture largely depends on income. As in so much else in our society, better-off workers are in a much healthier financial condition than their less-well-off peers.


There are a number of other intriguing findings in the survey. Among them:

Concern about health costs: Worker confidence about having enough money to pay for medical expenses and long-term care expenses in retirement remains well below their confidence levels for paying basic expenses. 

Retirees’ experience: Regardless of retirement age expectations, and consistent with prior RCS findings, half of current retirees surveyed say they left the work force unexpectedly (due to health problems, disability, or changes at their employer, such as downsizing or closure). 

Reliance on Social Security: Retirees report they are significantly more reliant on Social Security as a major source of their retirement income than current workers expect to be.

Expected vs. actual pension income: Although 56 percent of workers and/or their spouses expect to receive benefits from a defined benefit plan in retirement, only 33 percent report that they and/or their spouse currently have such a benefit with a current or previous employer.

Not calculating retirement needs: More than half of workers (56 percent) report they and/or their spouse have not tried to calculate how much money they will need to live comfortably in retirement.

Online technology: Only a minority of workers and retirees feel very comfortable using online technologies to perform various tasks related to financial management. Relatively few use mobile devices such as a smart phone or tablet to manage their finances, and just 10 percent of workers who use online technology say they are very comfortable obtaining advice from financial professionals online.

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