Retirement confidence among employees and retirees vaulted in 2018 to the highest level measured by AllianceBernstein (AB) in the 13 years the investment management firm has conducted a survey of participant attitudes.
When asked "How confident are you that you will have a comfortable retirement?" 47% said they were very confident or confident, much higher than the 32% response in 2017 and well above the previous record response of 41% in 2007.
While nearly half of the respondents feel confident, that means more than half are concerned. "There are cautionary signs under the surface," said a report issued Tuesday describing the survey results. For example, "there's already been a significant uptick in consumer debt in the last year alone," the report said.
Among the reasons cited by respondents who had low or no confidence about a comfortable retirement, 46% said they needed to save more, 44% said they didn't have enough savings and 41% said Social Security won't provide enough financial support. Multiple responses were allowed.
"Plan participants want longer-lasting savings, and a steady income stream in retirement, said Jennifer DeLong, managing director and head of defined contribution at AllianceBernstein, in a news release accompanying the survey report. "Unfortunately, not enough U.S. workers know how to save wisely, early and continuously."
Although many DC plans have adopted automatic enrollment in conjunction with a qualified default investment alternative, "fewer include automatic escalation of savings rates starting at high enough levels," Ms. DeLong said. She recommended that DC plans "consider offering" a lifetime income product to create for participants a steady income stream in retirement.
The Alliance Bernstein survey was conducted online in May from a national sample of 1,002 people, of which 893 were full-time employees participating in a workplace savings plan and 109 retirees who had previously worked full time and participated in a workplace savings plan.