19th Annual Retirement Confidence Survey: As Worker Expectations for Comfortable...

19th Annual Retirement Confidence Survey: As Worker Expectations for
Comfortable Retirement Plummet, Many Expect to Work Longer Before Leaving
Their Jobs

WASHINGTON, April 14 /PRNewswire-USNewswire/ -- The recession has cast a pall
over the retirement expectations of the vast majority of Americans, leaving a
record-low 13 percent this year able to say they are very confident of having
enough money to live comfortably in retirement, according to the 19th Annual
Retirement Confidence Survey (RCS) released today by the nonpartisan Employee
Benefit Research Institute (EBRI). Among workers, those feeling very confident
about retirement has tumbled by one-half in the last two years.

Because of the economic downturn, many workers say they expect to work longer,
the survey found, and more workers say they are planning to supplement their
income in retirement by working for pay.

Not surprisingly, workers overall who have lost confidence over the past year
about affording a comfortable retirement most often cite the recent economic
uncertainty, inflation, and the cost of living as primary factors, the RCS
reported. In addition, negative experiences such as job loss or a pay cut,
loss of retirement savings, or an increase in debt, almost always contribute
to loss of confidence among those who experience them.

Overall, the percentage of workers very confident about having enough money
for a comfortable retirement continued a two-year decline, falling to 13
percent this year, down from the previous low of 18 percent in 2008 and 27
percent in 2007. This is the lowest since the question was first asked in the
survey in 1993 and represents a 50 percent decline in worker confidence since
2007. Among current retirees, confidence in having a financially secure
retirement also dropped this year to a new low, with only 20 percent saying
they are very confident; that's down from 29 percent in 2008 and 41 percent in
2007.

"Our survey first picked up the drop in retirement confidence last year," said
Jack VanDerhei, research director at the Employee Benefit Research Institute,
co-sponsor of the survey with Mathew Greenwald & Associates, a survey research
firm. "Given the uncertainties that exist about economy, it is no surprise the
downward trend has continued. By any measure, the two-year results amount to a
very significant drop in workers' and retirees' confidence in their retirement
prospects."

The RCS (online at www.ebri.org) is the country's longest-running and most
comprehensive study of the attitudes and behavior of American workers and
retirees toward all aspects of saving, retirement planning, and long-term
financial security. The survey was funded by two dozen organizations. Full
survey results appear in the April 2009EBRI Issue Brief, available online at
www.ebri.org along with seven supplemental fact sheets.

Expected Retirement & Working in Retirement
The survey made two significant findings concerning workers' expected
retirement date and work in retirement:
-- Workers apparently expect to work longer because of the economic
downturn: 28 percent of workers in the 2009 survey say the age at
which
they expect to retire has changed in the past year. Of those, the vast
majority (89 percent) say that they have postponed retirement with the
intention of increasing their financial security. Nevertheless, the
median (mid-point) worker expects to retire at age 65, with 21 percent
planning to push on into their 70s. The median retiree actually
retired
at age 62, and almost half of retirees (47 percent) say they retired
sooner than planned.
-- More workers are also planning to supplement their income in
retirement
by working for pay: The proportion of workers planning to work after
they retire has increased to 72 percent in 2009 (up from 66 percent in
2007). This compares with 34 percent of retirees who report they
actually worked for pay at some time during their retirement.

Meeting Expenses in Retirement
The survey includes a wealth of other findings about attitudes toward
retirement. For example, workers who say they are very confident in having
enough money to take care of basic expenses in retirement dropped to 25
per-cent in 2009 (down from 40 percent in 2007), while only 13 percent feel
very confident about having enough to pay for medical expenses (down from 20
percent in 2007). Among retirees, only a quarter (25 percent, down from 41
percent in 2007) feel very confident about covering their health expenses

Other key RCS findings:
-- Cutting back, working more: Among workers who have lost confidence in
their ability to secure a comfortable retirement, most (81 percent)
say
they have reduced their expenses, while others are changing the way
they
invest their money (43 percent), working more hours or a second job
(38
percent), saving more money (25 percent), and seeking advice from a
financial professional (25 percent). Among all workers, 75 percent say
they and/or their spouse have saved money for retirement, one of the
highest levels ever measured by the RCS.
-- Little planning for retirement: Many workers still do not have a good
idea of how much they need to save for retirement. Only 44 percent of
workers report they and/or their spouse have tried to calculate how
much
money they will need to have saved by the time they retire -- and an
equal proportion (44 percent) simply guess at how much they will need
for a comfortable retirement.

-- Retirement contributions/savings: A large majority of workers
participating in a work-place retirement savings plan (72 percent)
state
that they have not changed the percentage of their salary contributed
to
the plan in the past year. However, 18 percent say they increased the
percentage contributed and 11 percent decreased the percentage. Of the
22 percent of workers eligible to contribute to an employment-based
retirement plan but not doing so, only 1 in 5 reported that they had
been contributing before October 2008. This translates into less than
5
percent of eligible workers, indicating that the economic downturn did
not cause many eligible workers to stop contributing to their
work-place
retirement savings plan.

Worker Confidence in Having Enough Money to Live Comfortably Throughout
Retirement, 1993-2009

1993 1994 1999 2004 2005 2006 2007 2008 2009

Very confident 18% 20% 22% 24% 25% 24% 27% 18% 13%

Somewhat
confident 55 45 47 44 40 44 43 43 41

Not too
confident 19 17 21 18 17 17 19 21 22

Not at all
confident 6 17 9 13 17 14 10 16 22

Source: Employee Benefit Research Institute and Mathew Greenwald &
Associates, Inc., 1993-2009 Retirement Confidence Surveys.

The 2009 Retirement Confidence Survey was conducted in January 2009 through
20-minute random digit telephone interviews with 1,257 individuals age 25 and
older in the United States. The survey has a margin of error of plus or minus
three percentage points. The survey dates to 1991; questions about worker and
retiree confidence in having enough money for a comfortable retirement have
been asked consistently since 1993.

EBRI is a private, nonprofit research institute based in Washington, DC, that
focuses on health, savings, retirement, and economic security issues. EBRI
does not lobby and does not take policy positions. www.ebri.org

SOURCE Employee Benefit Research Institute

Craig Copeland, +1-202-775-6356, copeland@ebri.org, John MacDonald,
+1-202-775-6349, macdonald@ebri.org, or Jack VanDerhei, +1-202-775-6327,
vanderhei@ebri.org, all of EBRI