Americans Pessimistic On Retirement Prospects But Seek Advice

A recently released report showed that nearly half of American workers surveyed lack confidence in their ability to live comfortably in retirement and most are hungry for sound retirement planning advice.

In a release, the company said that the 23rd annual Retirement Confidence Survey shows that 49 percent of workers are "not at all" or "not too" confident in their ability to retire comfortably. The survey, the longest-running of its kind, was conducted by the nonpartisan Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates, Inc., and co-sponsored by The Guardian Life Insurance Company of America (Guardian).

Declining Confidence Surrounding Retirement

The survey data shows that workers continue to lose confidence in their ability to pay for basic expenses into retirement – 29 percent lack confidence today compared to 18 percent in 2007 – and medical expenses – 52 percent today compared to 32 percent in 2007.

"The EBRI survey chronicles a growing level of pessimism among Americans about their financial well-being in retirement," said Michael B. Cefole, an EBRI Board Member and Senior Vice President of Guardian Retirement Solutions. "We also know that workers are in need of professional advice and guidance, and the EBRI survey demonstrates the importance of preparing people to plan effectively for their retirement years."

In fact, 52 percent of workers in the survey say it would be "very valuable" to receive recommendations about how to make savings last throughout retirement, and 36 percent think it would be "somewhat valuable." Significantly, 45 percent of workers in the survey report they simply guessed in order to arrive at the level of savings necessary to live comfortably in retirement.

The continued decline in workers' confidence about retirement might be due to the realization of what is necessary to prepare for retirement. According to the EBRI survey, 41 percent state that the cost of living prevents them from saving more. One of the survey's key findings shows that roughly 60 percent of workers and 40 percent of retirees reported debt problems and were the least likely of all respondents to have confidence in their overall retirement outlook.

Financially Secure Retirement Requires Education, Self-Awareness

According to the survey, employees who have done a retirement-savings-needs calculation tend to have higher savings goals, and are more confident, than workers who have not. "Education and financial literacy are the keys to ensuring that people are planning properly for retirement," said Doug Dubitsky, Vice President of Product Management & Development for Guardian Retirement Solutions. "There is a huge need nationally for a deeper engagement with workers, plan sponsors and advisors about preparing for a financially secure retirement."

As part of Guardian's on-going efforts to educate future retirees and bring clarity and focus to the psychological aspects of retirement planning, Guardian said it launched a new website last fall called Retirement Style Matters This interactive tool teaches people that who they are can have a major impact on how they invest.

"There is more to retirement planning than just charts and graphs," said Dubitsky. "We know personality also plays a large role in the way people prepare for retirement."

Bright Spot: Majority Participate in Employer-Sponsored Retirement Plans

According to the survey, 41 percent of survey respondents state that they are "not at all" confident about future Social Security benefits. However, 72 percent of employed workers participating in the survey have access to employer-sponsored retirement plans. Of these respondents, 8 in 10 currently contribute to the plan.

"Employer-sponsored retirement plans such as 401(k)s continue to gain favor with employees and their employers," said Jason Frain, Vice President, 401(k) Product Management and Development, Guardian Retirement Solutions. "As the survey results show, an overwhelming majority of employees will take advantage of an employer-sponsored plan if they have access to one. In recent years, plan advisors, sponsors and service providers such as Guardian have made great strides in educating employees on the benefits of such plans and in providing access to a broad range of investment options."

More information:

www.ebri.org

www.GuardianLife.com

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