American workers and those at or near retirement report an optimistic attitude related to their feelings about living comfortably in retirement, in spite of well-documented savings challenges and the ravages of the COVID-19 pandemic on the U.S. economy. This is according to the results of the 32nd Retirement Confidence Survey (RCS), conducted by the Employee Benefit Research Institute (EBRI).
“Even with the concerns of the pandemic and rising prices, overall, American workers and retirees still feel positive about their retirements,” said Craig Copeland, director of wealth benefits research at EBRI. “The Americans who are more likely to feel that their futures appear grim since the pandemic are those who were already pessimistic about their futures, due to lower incomes, problems with debt, or lower health status.”
Most respondents reported that their spending habits and lifestyle in retirement generally conform to what they had expected, however roughly 1 in 3 respondents reported that their spending levels were higher. This is an increase compared to the 2021 results, which reported roughly 1 in 4 respondents were spending more than they expected to in retirement.
“This could reflect increased use and desire for travel and leisure as the pandemic lulls. It can also reflect inflation and the increased cost of travel and entertainment for some,” said Lisa Greenwald, CEO of Greenwald Research. “While it is hard to know which reason is driving the higher expenses, a strong majority of retirees still feel their retirement lifestyle and spending are on track.”
However, over 70% of respondents reported that they felt confident about their financial standing in retirement, with 30% of respondents taking it further and describing their attitude as “very confident” according to the results. The survey also found that retirees’ confidence in retirement took a far more modest hit due to the pandemic than did the confidence of those still working.
“Nearly 7 in 10 retirees report that the COVID-19 pandemic has not changed their confidence in their ability to live comfortably throughout their retirement,” EBRI said in a statement announcing the survey’s results. “However, only half of workers report this.”
For retirees who have saved money, their confidence level was much higher than those who did not. However, that confidence has become eroded by current levels of inflation rampant throughout the U.S. economy, the survey says.
“Almost three-quarters of retirees who feel more confident in their ability to live comfortably through retirement since COVID report it was due to having money in savings or having good investments,” EBRI says. “But half of retirees who feel less confident state it was due to inflation.”
Additionally, the survey found that debt is challenging the ability of workers to prepare adequately for retirement, and many Americans are unsure of who to trust or where to turn to find reliable information about retirement finances.
Read the full summary of the survey at EBRI.