An increasing number of today’s workers are confident they’re headed toward a secure, comfortable retirement. But how they feel about their future is far different from how prepared they are. That was the main finding from the latest Retirement Confidence Survey that’s been conducted annually by the Employee Benefit Research Institute (EBRI) since 1996.
According to the 2014 survey, 55% of today’s workers are somewhat or very confident about having enough money to live comfortably through retirement. That’s up from 51% in 2013. However, while the confidence numbers are up, the actual preparedness numbers are not. Among workers closest to retirement—those ages 55 or older—just 42% reported having more than $100,000 in savings and investments. That's unchanged from last year. A sizable percentage of all workers (36%) say they have less than $1,000 in savings and investments. The cost of living and day-to-day expenses head the list of reasons why workers say they do not save or do not save more for retirement.
Among other findings:
- Just 44% of today’s workers have tried to calculate how much money they need to save for a comfortable retirement, a figure that has remained largely unchanged for the past decade
- 49% of current retirees surveyed say they retired earlier than planned, and more than 60% of those did so due to health-related reasons
- 65% of today’s workers plan to work for pay in retirement, but just 27% of current retirees actually have worked for pay in retirement
Bridging Retirement Confidence and PreparednessAmong our recommendations:
- Use one or more online calculators to estimate how much you’re likely to need to have saved by the time you retire, starting with the SMI Retirement Planning Calculator
- While you may intend to work past the traditional retirement age, it’s best to base your financial plan on an age-65 retirement
- Be on track to pay off your home by age 65 at the latest
- Give careful consideration to your potential need for long-term care insurance