While more than half of works are confident to some degree that they’ll have enough money for a comfortable retirement, an even greater amount say they are having problems with their debt levels, new research reveals.
A combined 55% of workers interviewed for the Employee Benefit Research Institute say they’re “somewhat” (37%) or “very” (18%) confident about having enough money in retirement to be comfortable. This represents an increase from record lows between 2009 and 2013, consistent with the Great Recession.
Retiree confidence in ongoing financial security also increased from 18% last year to 28%.
“The 24th wave of the Retirement Confidence Survey (RCS) finds that Americans’ confidence in their ability to afford a comfortable retirement has rebounded somewhat from the record lows of the past five years,” said the researchers in an March 2014 Issue Brief. “However, this increased level of confidence does not appear to be founded on improved retirement preparations.”
While confidence in retirement has increased from 2013 to 2014, most of that has occurred among workers with higher household income, notes EBRI, of $75,000 or above. Households participating in a retirement plan, such as an IRA, were also more confident.
There is still a significant contingent of workers who report having little to no savings and investments. Among those interviewed, 36% said they have savings of less than $1,000.
Additionally, 58% of workers and 44% of retirees report having a problem with their level of debt.
Cost of living and day-to-day expenses top the list of reasons why workers aren’t saving money for retirement, or aren’t saving enough, cited by 53% of surveyed workers.
However, workers’ confidence in their ability to pay for basic expenses in retirement jumped four percentage points to 29%.
Worker confidence in being able to afford long-term care, whether in a nursing home or at home, hasn’t changed much from 11% last year to 13% in 2014. More than three in 10 are “not at all” confident in their ability to afford long-term care expenses in retirement.
View the EBRI’s Issue Brief on the 2014 Retirement Confidence Survey.
Written by Alyssa Gerace