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 survey found that 64% of today’s workers are somewhat or very confident about having enough money to live comfortably throughout their retirement years. That’s up from 60% in the 2017 survey. However, among workers closest to retirement age — those ages 55 or older — just 57% have more than $100,000 in savings and investments.

There are two other retirement-related gaps that today’s workers should be mindful of as well: The gap between when they plan to retire and when today’s retirees actually did retire, and the gap between their expectations about being able to work for pay during retirement and the number of today’s retirees who actually have worked for pay.

Today, 48% of workers expect to retire later than age 65. However, just 19% of today’s retirees actually did retire that late (only 7% waited at least until age 70 to retire), and 48% of today’s retirees say they stepped out of the paid workforce earlier than they expected to. Of those, many did so because of an unexpected hardship, such as a health problem or disability (41%) or changes at their company (26%).

As for generating income from paid work while retired, 79% of today’s workers expect to do so, whereas just 34% of today’s retirees actually have worked for pay since retiring.

Bridging the gap

How can today’s workers more realistically set their expectations and better prepare for 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 (45% of today’s workers age 55 or older have not 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.
     
  • Give careful consideration to your potential need for long-term care insurance.

To what degree is your confidence about having enough money to live comfortably in retirement in synch with your actual preparedness?