The latest installment in one of the longest-running retirement preparedness studies points to too much debt and too little financial knowledge as among the most significant retirement roadblocks. The Employee Benefit Research Institute’s (EBRI) 32nd annual Retirement Confidence Survey paints an overall optimistic picture of retirement in the U.S., with more 73% of current workers expressing confidence that they will have enough money in retirement to live comfortably and 77% of current retirees saying they’re confident they’ll have enough to continue living comfortably. However, the survey also pointed to some areas of financial vulnerability.

The weight of debt

Some 46% of today’s workers say debt is negatively impacting their ability to save for retirement. And 27% of today’s retirees said debt is negatively impacting their ability to live comfortably in retirement.

While the survey didn’t break debt down into specific types, other surveys have pointed to an increase in the number of people bringing a mortgage into their later years. As we have recommended before, it's wise to plan to retire your mortgage by the time you retire from your job. And if you plan to refinance, be careful about resetting the 30-year payoff clock to a date that’s past your intended retirement age.

A little knowledge could go a long way

Several questions on the survey highlighted where an investment in financial education could be very beneficial. For example, while target-date funds have become the default investment choice in many workplace retirement plans, 40% of survey respondents said they do not understand how such funds work. As we’ve written before, different companies that offer target-date funds design their funds with different asset allocations — even for funds that carry the same target retirement date.

Another 37% of survey respondents acknowledged not knowing where to go for financial or retirement planning advice. Asked where they do go for such advice, the most popular answer, at 35%, was family or friends.

A consistent story

Similar to past surveys, the latest EBRI Retirement Confidence survey shows a couple of important areas of disconnect between today’s workers and today’s retirees. For example, whereas 70% of today’s workers believe they will work for pay to some degree in retirement, only 27% of today’s retirees have actually done so. And, while 65% of workers expect to retire at age 65 or later (including 15% who expect to never retire), only 32% of today’s retirees waited that long. Importantly, some two-thirds of today’s retirees said they left work for reasons that were outside of their control, such as health issues for themselves or a loved one or a company downsizing.

The lesson? When using retirement planning software, such as MoneyGuide, base your calculations on a retirement age that’s a bit younger than your true intended retirement age.

To read more about the survey results, click here.