Gaps Between Retirement Confidence and Preparedness Persist

May 6, 2019
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It’s a story we’ve been reporting on for many years — the number of today’s workers who are confident they’ll enjoy a secure, comfortable retirement continues to be at odds with their actual preparedness, according to the latest annual Retirement Confidence Survey from the Employee Benefit Research Institute (EBRI).

The 2019 iteration of a survey the EBRI has been conducting for 29 years found that 67% of today’s workers are confident about having enough money to live comfortably throughout their retirement years. That’s up from 64% in the 2018 survey.

The latest survey found some improvement in how much money workers have saved for retirement, with 66% of those ages 55 or older saying they have at least $100,000 — up from 57% in 2018. However, their expectations about continued work remain at odds with the experiences of today’s retirees.

For example, whereas 45% of today’s workers expect to retire later than age 65, just 16% of today’s retirees actually did retire that late (only 6% waited at least until age 70), and 43% of today’s retirees say they stepped out of the paid workforce earlier than they expected to. While some did so because they could afford to, far more early retirees cited an unexpected hardship, such as a personal health problem or the need to care for a loved one, or changes at their company, such as a downsizing or changes in the skills required to do their job.

In addition, 80% of today’s workers expect to generate income from paid work while retired, whereas just 28% of today’s retirees actually have worked for pay since retiring.

Bridging the gap

How can today’s workers better prepare for and more realistically set their expectations about retirement? Here are a few recommendations.

  • Use a retirement planning calculator, such as MoneyGuidePro® to estimate your future needs and how much you need to invest each month to get there (only 42% of workers have done this, according to the EBRI study). Creating this estimate is not a precise science, but by running some numbers, you can get a feel for what you need to be doing now in order to adequately prepare for your later years.

  • Plan vocationally, emotionally, and spiritually to work past age 65, while you plan financially to retire by age 65 since you may not be able to work any longer.

  • If you’d like to generate some income in retirement, start working on that now, whether that means starting a business on the side or developing the skills and contacts you’ll need in order to do the work you envision.

  • Be on track to pay off your mortgage by age 65.

  • Pay off other debt. Some 70% of workers with non-mortgage debt say their debt has impacted their ability to save for retirement.

  • Give careful consideration to your potential need for long-term care insurance.

How well do you think your confidence about having enough money to live comfortably in retirement is in line with your actual preparedness?

Written by

Matt Bell

Matt Bell

Matt Bell is Sound Mind Investing's Managing Editor. He is the author of five biblical money management books and the teacher or co-teacher on three video-based small group resources. His latest book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management, was published by Focus on the Family in 2023. Matt has spoken at churches, universities, and conferences throughout the country and has been quoted in USA TODAY, U.S. News & World Report, and many other media outlets.

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