Retirement Savings Plan a Key Factor in Retirement Confidence

The 2015 Retirement Confidence Survey: Having a Retirement Savings Plan a Key Factor in Americans’ Retirement Confidence

By Ruth Helman, Greenwald & Associates; and Craig Copeland, Ph.D., and Jack VanDerhei, Ph.D., Employee Benefit Research Institute

 

 

The 2015 annual Retirement Confidence Survey (RCS) marks the 25th year of the RCS, making it the longest-running survey of its kind in the nation. Among this year’s highlights:

  • Whether or not Americans have a retirement savings plan is a key factor in their outlook about having an affordable retirement. The 2015 RCS by EBRI/Greenwald & Associates finds that the nation’s retirement confidence continues to rebound from the record lows experienced between 2009 and 2013—but this is based on the increasing optimism of those who indicate they and/or their spouse have a retirement plan.
  • The percentage of workers confident about having enough money for a comfortable retirement, at record lows between 2009 and 2013, increased in 2014 and again in 2015. Twenty-two percent are now very confident (up from 13 percent in 2013 and 18 percent in 2014), while 36 percent are somewhat confident. Twenty-four percent are not at all confident (statistically unchanged from 28 percent in 2013 and 24 percent in 2014).
  • The increased confidence since 2013 is strongly related to retirement plan participation. Among those with a plan, the percentage very confident increased from 14 percent in 2013 to 28 percent in 2015. In contrast, the percentage very confident remained statistically unchanged among those without a plan (10 percent in 2013, 9 percent in 2014, and 12 percent in 2015). · Retiree confidence in having a financially secure retirement, which historically tends to exceed worker confidence levels, also increased, with 37 percent very confident (up from 18 percent in 2013 and 27 percent in 2014). The percentage not at all confident was 14 percent (statistically unchanged from 14 percent in 2013 and 17 percent in 2014).
  • Worker confidence in the affordability of various aspects of retirement has also rebounded. In particular, the percentage of workers who are very confident in their ability to pay for basic expenses has increased (37 percent, up from 25 percent in 2013 and 29 percent in 2014). The percentages of workers who are very confident in their ability to pay for medical expenses (18 percent, up from 12 percent in 2011) and long-term care expenses (14 percent, up from 9 percent in 2011) are slowly inching upward.
  • Cost of living and day-to-day expenses head the list of reasons why workers do not save (or save more) for retirement, with 50 percent of workers citing these factors. Nevertheless, many workers say they could save a small amount more. Seven in 10 (69 percent) state they could save $25 a week more than they are currently saving for retirement.

From ERBI – Employee Benefit Research Center. Ruth Helman, Craig Copeland, and Jack VanDerhei, “The 2015 Retirement Confidence Survey: Having a Retirement Savings Plan a Key Factor in Americans’ Retirement Confidence,” EBRI Issue Brief, no. 413 (Employee Benefit Research Institute, April 2015).

 

Do I have enough saving for retirement and can I retire comfortably?

American workers’ confidence in their ability to retire comfortably, which languished at record lows between 2009 and 2013, continues to rebound. Twenty-two percent of workers are now very confident they will have enough money to live comfortably throughout their retirement years (up from 18 percent in 2014 and 13 percent in 2013). Thirty-six percent say they are somewhat confident. Twenty-four percent of workers are not at all confident that they will have enough money to live comfortably throughout their retirement years (still far above the low of 10 percent in 2007), and 17 percent are not too confident they will have enough money. While nearly half of all workers (49 percent) were not too or not at all confident of having enough money for retirement in 2013, 41 percent report these levels of confidence in 2015 (Figure 1).

 

worker confidence

Retiree confidence about having a financially secure retirement has also increased. Thirty-seven percent of retirees are very confident about having enough money to live comfortably throughout their retirement years (up from 28 percent in 2014 and 18 percent in 2013) and 33 percent are somewhat confident. At the same time, 14 percent say they are not at all confident, and another 14 percent of retirees are not too confident. Like worker confidence, retiree confidence in having enough money for retirement has varied over the 25 years of the RCS, though the level of confidence expressed by those already in retirement has tended to outpace that of those yet to retire. Retirement confidence remained fairly steady at roughly 40 percent very confident and 10 percent not at all confident from 2002 through 2007, but the percentage stating they were very confident declined in 2008 and 2009 (Figure 2)

Retiree Confidence

Retiree Confidence

However, workers and retirees say they spend little time doing retirement planning—less than they spend planning for the holidays. While 4 in 10 (40 percent) workers and one-third (33 percent) of retirees say they spent eight or more hours planning for the holidays in the past year, only one-third (34 percent) of workers and 2 in 10 (21 percent) retirees report they spent that amount of time planning for retirement.3 These are approximately the same as the percentages that report spending eight or more hours planning for social events (34 percent of workers and 23 percent of retirees) and vacations (31 percent of workers and 20 percent of retirees) in the past year.

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