U.S. workers appear to be coming back to reality about their retirement prospects, according to a survey by the Employee Benefit Research Institute, Washington.
Workers' confidence in their retirement income prospects dropped 12 percentage points in the past year, according to the 1996 Retirement Confidence Survey, co-sponsored by EBRI, Mathew Greenwald and Associates and the American Savings Educational Council.
Confidence in the future might be dropping as workers realize their own lack of planning. Only one-third of workers surveyed said they have tried to figure out how much they need to save to ensure a comfortable retirement. Of these, only one-third were very confident their calculations had produced an accurate figure. Only 42% of those who did do the math could subsequently name the projected amount, leaving less than 20% of those surveyed who had a specific dollar goal.
The experience of retirees might provide more cause for concern. One-fifth of retirees surveyed said their standard of living dropped measurably after they stopped working and one-fifth expected their standard to worsen.
Adding to the pessimistic outlook was workers' dim expectations of the Social Security system. About half of those surveyed said they expected Social Security to be only a minor source of retirement income and 23% did not expect Social Security would provide anything. In addition, 79% of the random survey universe of 1,000 Americans older than 26 said they expected Social Security benefits would be lessened in value from today's benefit levels and 76% were not confident about the future of Medicare.
EBRI President Dallas Salisbury indicated the drop in confidence might be a good thing, because it will encourage workers to plan and save more now, while still working.