Employees are more pessimistic than they have been in two decades about their retirement, according to the 2011 retirement confidence survey by the Employee Benefit Research Institute (EBRI) in Washington.
Twenty-seven per cent of survey respondents said they are “not at all confident” about retirement, up five percentage points from one year ago. The percentage of workers who said they are “very confident” of a comfortable retirement was 13 per cent — the lowest rate ever measured by the EBRI.
The survey also found that roughly one-third of both workers and retirees said they had to dip into their savings last year to pay for basic expenses.
“People’s expectations need to come closer to reality so they will save more and delay retirement until it is financially feasible,” said Jack VanDerhei, EBRI research director and co-author of the report.
While 59 per cent of all workers surveyed said they are currently saving for retirement, more than half (56 per cent) said they have less than $25,000 in savings and investments, excluding
the value of their primary residence and any defined benefit pension plans.
About one-third (31 per cent) of workers said they will need less than $250,000 to afford a comfortable retirement. Yet almost half (45 per cent) are not too or not at all confident they and their spouse will be able to save as much as they think they need, and 70 per cent said they are a little or a lot behind schedule in planning and saving for retirement.
A significant number of workers (20 per cent) said they now intend to retire later (at an older age) than they had planned.
“Many people are planning to work longer and retire later because they know they simply can’t afford to leave the workplace — both for the paycheck and for the benefits,” said Mathew Greenwald, co-author of the study.
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