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Reinforcing that trend, the percentage of workers saying they are “very confident” of a comfortable retirement ties with 2009 at 13 percent—the lowest rate ever measured by the RCS.
The survey also found that roughly a third of both workers and retirees said they had to dip into their savings last year to pay for basic expenses. Significantly, the RCS also found that those with retirement savings—such as a 401(k) or an individual retirement account (IRA)—were far less likely than those without these accounts to tap into their savings.
This is the 21st annual RCS, and is conducted by the nonpartisan
“To me, these are positive findings: People are increasingly recognizing the level of savings realistically needed for a comfortable retirement. We know from previous surveys that far too many people had false confidence in the past,” said
Survey co-author
VanDerhei noted that the RCS finds that many systemic conditions are forcing Americans to redefine retirement, such as high unemployment rates; federal, state, and local government fiscal crises; rising health care costs; lower investment returns; a surge in the older population, putting stress on social insurance programs such as
Among key findings from this year’s RCS:
- “Not confident” up: More than a quarter of American workers (27 percent) now say they are “not at all confident” about having enough money for retirement, up from 22 percent in 2009 and 2010, and the highest level ever measured in the 21-history of the RCS.
- “Very confident” down: Correspondingly, the percentage of workers who say they are “very confident” about having enough money for retirement ties with 2009 at 13 percent—the lowest level ever recorded by the RCS.
- Drawing on savings: A third of all Americans (34 percent of workers, 33 percent or retirees) say they had to tap an IRA, 401(k), savings or investment accounts, or had to take a loan against those accounts, in order to pay for basic expenses. However, those who had retirement savings accounts—such as 401(k)s and IRAs—were far less likely to tap their savings than those who did not have these accounts.
- Preparing for retirement: The RCS continues to find that many people do not plan or save for retirement:
- While 59 percent of all workers say they are currently saving for retirement, more than half (56 percent) say they have less than
$25,000 in savings and investments, excluding the value of their primary residence and any defined benefit (pension) plans. - About a third (31 percent) of workers say they will need less than
$250,000 to afford a comfortable retirement. - Yet almost half (45 percent) are not too or not at all confident they and their spouse will be able to save as much as they think they need, and 70 percent say they are a little or a lot behind schedule in planning and saving for retirement.
- Well over a third (42 percent) say they determined their retirement savings needs by guessing.
- While 59 percent of all workers say they are currently saving for retirement, more than half (56 percent) say they have less than
- Paying for health care in retirement: Workers are evenly split about being confident of having enough money to take care of medical expenses in retirement (48 percent very or somewhat confident, vs. 50 percent not too or not at all confident). Current retirees are sharply more optimistic on this score: 68 percent confident, vs. 30 percent not confident.
- Delayed retirement: A significant number of workers (20 percent) say they now intend to retire later (at an older age) than they had planned. Of those who say they will retire later, the main reason cited was the poor economy (36 percent), a lack of faith in
Social Security or the government (16 percent), a change in employment situation (15 percent), or because they can’t afford to retire (13 percent). - Forced early retirement: Confirming findings from earlier waves of the RCS, almost half of current retirees (45 percent) say they retired earlier than they planed, mainly because of a health problem or disability.
- Trusted institutions: Workers continue to rank private employers as the most trusted institution (24 percent “very confident”); the federal government continues to rank as the least trusted (18 percent “not at all confident”). Banks, which were heavily supported by infusions from the federal government during the recent recession, ranked as the second-most trusted institution (17 percent “very confident”).
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