Where is Your Retirement Confidence?
Or maybe the better question is: Do you have any confidence in your retirement? I do but not without some trepidation. According to recent survey published by the Employee Benefit Research Institute, Americans who feel confident about their retirement are in the minority.
- Only 14 percent of Americans are “very confident” they will have enough money to live comfortably in retirement. This is an historic low number. A lot of this is related to uncertainty in the job market, a concern expressed by 42% of the respondents. Similar financial concerns are linked to an inability to meet future health care and long term care obligations. Employment insecurity looms large: Forty-two percent identify job uncertainty as the most pressing financial issue facing most Americans today.
- For so many people, retirement savings and investments are non-existent. Specifically, 60 percent of workers state that the total value of their household savings and investments (not including pensions and home equity) is less than $25,000. For a worker over 40, that is a scary bad statistic.
- One-half of current retirees surveyed say their retirement was unplanned. Instead, they stopped working because of health problems, a disability, or a job action by their employer (e.g., the infamous ”downsizing”). Folks who rely on the “I’ll just work longer” retirement plan should take careful note of this.
- This next stat is crazy: 56 percent of workers say neither they nor their spouse have tried to calculate how much money they will need save so that they can live comfortably in retirement. This is the “head in the sand” retirement plan. (The adult children of these folks should probably intervene for their own future protection!)
For baby boomers with no meaningful savings, there is not much opportunity to fix the problem, particularly if they become one of the 50% who retire involuntarily. Social Security will be it for them. If they also retire with debt, financial survival is questionable.
There are non-financial reasons to be uncertain about retirement. I think I will write more about those another time.
Where does your retirement confidence fall on a scale of 1-10 where 1=”I’m doomed”, 5=”I might make it if I stay healthy, the markets improve, and inflation is low” and 10=”No worries – I am financially set for a satisfactory retirement lifestyle under all foreseeable cirumstances.”
I would say that we are an 8 for now but shooting for 10.
Here is a link to the EBRI survey.
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