With a mountain of household debt and a molehill of retirement savings, most Americans would be delusional if they were confident about retiring securely. The results of two new national surveys suggest that most Americans are perfectly sound of mind in that respect.
The 2011 Retirement Confidence Survey, a project of the Employee Benefit Research Institute (EBRI) and Principal Financial Group, found that only 13% (tying an all-time low) of American workers are “very confident” about having enough money to live comfortably in retirement and 27% (an all-time high) are “not at all confident.”
Simultaneously, a new Country Financial survey showed that only 28% of Americans surveyed believe a middle-income family can save enough for a secure retirement. That’s two points lower than last year and nine points less than 2007.
“High unemployment rates; government fiscal crises; rising health care costs; lower investment returns; a surging older population putting pressure on Social Security and Medicare; and longer life expectancies” are all sapping confidence, the EBRI/Principal survey showed.
Just 19% of Americans think they will need $1 million or more for retirement, while 64% think they’ll need less, according to Country Financial. Another 18% are unsure.
Among other key findings in the 2011 Retirement Confidence Survey, available on the EBRI website at www.ebri.org:
- Roughly a third of both workers and retirees dipped into savings last year to pay for basic expenses. Those with 401(k) or an individual retirement accounts (IRA) were far less likely than those without these accounts to tap into savings.
- More than four in ten (42%) say they guesstimate their retirement savings needs, while 70% say they are a little or a lot behind schedule in planning and saving for retirement.
- More than half of workers say they have less than $25,000 in total savings and investments, excluding their homes.
- A significant number of workers (20%) say they now intend to retire later (at an older age) than they had planned. But almost half of current retirees (45%) say they retired earlier than they planned, mainly because of a health problem or disability.
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