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Retirement Confidence Reaches Record Low
The Employee Benefit Research Institute’s (EBRI) 2011 Retirement Confidence Survey found that the percentage of workers “not at all” confident about having enough money for a comfortable retirement rose to 27 percent, the highest level in the 21 years of this survey. The number of those who are “very” confident dropped to 13 percent.
While the proportion of workers who are “very” confident that they’ve done a good job of financial preparation for retirement has remained fairly steady at about 22 percent in recent years, the rising percentage of those “not too” or “not at all” confident reached 36 percent in 2011.
Saving results are declining
Two-thirds of workers said they and/or their spouse have saved money for retirement. Only about 60 percent said that they are currently saving for retirement.
More than half of the workers responding reported that their savings and investments (excluding their primary residence and any defined benefit plan) total less than $25,000. Of those, almost a third said they have under $1,000.
Only 10 percent said they have total savings and investments of $250,000 or more.
Few have set savings goal
Only 42 percent of workers said they and/or their spouse have calculated how much they need to put aside for a comfortable retirement. And almost one-third of them concluded that they will need $250,000 or less in savings.
More than two-thirds (70 percent) of workers said they are “a little” or “a lot” behind schedule in planning and saving for retirement.
Expected retirement age is rising
Twenty percent of workers said the age at which they expect to retire increased in the past year. The top reasons cited were:
- Poor economy (36%)
- Lack of faith in Social Security (16%)
- Change in employment situation (15%)
- Can’t afford to retire (13%)
- Cost of living in retirement higher than expected (10%).
In 1991, 31 percent of workers expected to retire between the ages of 60 and 64; in 2011, that dropped to 16 percent. Those planning to retire at age 65 represented 34 percent of respondents twenty years ago, but only 26 percent in 2011.
Three-quarters of those now working said they plan to work for pay after retiring.
EBRI’s survey is at http://tinyurl.com/EBRI2011RetConfSurvey.
The Department of Labor is considering changing the definition of “fiduciary” in the context of investment advice and ERISA plans. Read their Fact Sheet on the proposed rule at http://tinyurl.com/DOLFactSheetFiduciary.
Kmotion, Inc., P.O. Box 1456, Tualatin, OR 97062; 877-306-5055; www.kmotion.com
© 2011 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance, nor as the sole authority on any regulation, law, or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.