Get the Facts: The EBRI Studies
If you are interested in what others are currently thinking and doing about retirement, there is no better resource to turn to than EBRI. For the past 20 years, the Employee Benefits Research Institute (EBRI) has been conducting a survey of retirement confidence.
In general, the 2010 results indicate that after two straight years of dropping sharply, Americans’ confidence in their ability to afford a comfortable retirement has stabilized, but retirement preparations are still eroding, leaving them less prepared for retirement than they would like.
Here are some of the highlights from the 2010 Retirement Confidence Survey (RCS):
1. The percentage of workers very confident about having enough money for a comfortable retirement remains steady at 16 percent. Retiree confidence about having a financially secure retirement has also stabilized, with 19 percent saying now they are very confident (statistically equivalent to the 20 percent measured in 2009)
2. Worker confidence about paying for basic expenses in retirement has rebounded slightly, with 29 percent now saying they are very confident about having enough money to pay for basic expenses during retirement.
3. The percentage of retirees indicating they are very confident about paying for basic expenses has stayed level at 33 percent.
4. The percentages of workers very confident about other financial aspects of retirement have held steady at 12 percent for medical expenses, 10 percent for long-term care expenses, and 21 percent for doing a good job of preparing for retirement. However, the percentages not confident continue to creep upward, from 44 percent in 2009 to 51 percent in 2010 for medical expenses, from 56 percent to 61 percent for long-term care expenses, and from 30 percent to 35 percent for doing a good job of preparing for retirement.
5. Fewer workers report that they and/or their spouse have saved for retirement (69 percent, down from 75 percent in 2009) Moreover, fewer workers say that they and/or their spouse are currently saving for retirement (60 percent, down from 65 percent in 2009). An increased percentage of workers report they have virtually no savings and investments. Among those providing this type of information, 27 percent say they have less than $1,000 in savings. In total, more than half of workers (54 percent) report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.
6. Those who have saved for retirement have recovered some confidence in their ability to invest their savings wisely.
7. Many workers continue to be unaware of how much they need to save for retirement. Less than half of workers (46 percent) report they have tried to calculate how much money they will need to live comfortably in retirement.
8. The savings goals cited by workers who have done a retirement needs calculation have increased over time. In the 2000 RCS, 31 percent said they needed to accumulate at least $500,000 for retirement. This percentage increased to 54 percent in 2010.
9. One-quarter of workers (24 percent) report they have postponed their planned retirement age. Among the reasons cited for delaying retirement are the poor economy, a change in their employment situation, inadequate finances, and the need to make up for losses in the stock market.
10. The percentage of workers who expect to retire after age 65 has increased over time, from 11 percent in 1991 to 33 percent in 2010.
11. Americans continue to lack confidence in institutions. They are most likely to express confidence in private employers and least likely to feel confidence in the federal government.
12. Fewer workers are expecting to receive retirement income from Social Security (77 percent, down from 88 percent in 1991) and defined benefit plans (56 percent, down from 62 percent in 2005).
To see the full report, go to http://www.ebri.org/pdf/briefspdf/EBRI_IB_03-2010_No340_RCS.pdf