Concerns about the economy, home values and health costs continue to sap workers confidence that they will have enough cash for a comfortable retirement.
The percentage of workers who said they were very confident about having enough money to retire comfortably dropped to 18% this year from 27% in 2007, according to the 2008 Retirement Confidence Survey slated to be unveiled today.
(That represents the largest one-year drop in confidence in the 18-year history of the survey, the study said.)
At the same time, the percentage of workers who said they lacked confidence about having enough money for a comfortable retirement jumped to 37% this year from 29% in 2007. The survey was conducted by the Employee Benefit Research Institute, a Washington retirement research organization, and Mathew Greenwald & Associates Inc., a Washington public opinion and market research company.
The good news is that after years of false optimism, at least active workers are beginning to realize that their current level of retirement savings appears to be inadequate for living comfortably throughout their retirement years, said Jack VanDerhei, one of the studys co-authors, in an interview. Mr. VanDerhei is also an EBRI fellow and professor at Temple University, Philadelphia.The survey also found that the percentage of retirees who were very confident about maintaining enough money for a comfortable retirement plummeted to 29% this year from 41% in 2007. The percentage of those lacking confidence rose to 34% this year from 21% last year.
While the survey found that the percentage of workers who say theyve saved for retirement rose to 72% in 2008 from 66% the year before, nearly half of those saving for retirement had total savings and investments minus the value of their primary residences and any defined benefit plans of less than $50,000. Seventy-six percent of workers who said they had not saved for retirement reported total assets of less than $10,000.
The survey also said that while 41% of workers said they or their spouse had a defined benefit plan, 59% said they expected to receive income from a DB plan in retirement.
The discrepancy between those numbers suggests that some workers may be under the illusion that they will receive a retirement benefit that will not actually get, the study said.
Conducted in January, the EBRI-Greenwald survey was based on telephone interviews of a random sample of 1,057 workers and 265 retirees in the U.S. age 25 and older.Doug Halonen