American workers insecure about retirement savings, jobs
March 15, 2012
A new report indicates that Americans' confidence in their ability to retire comfortably remains near historic lows, and that many are also still concerned about job security.
The 2012 Retirement Confidence Survey, published by the Employee Benefit Research Institute, is the longest running retirement survey of its kind. It polls both workers and retirees on their perceptions of issues such as savings, job security and retirement, and the edition released this month revealed several troubling facts for American workers.
Retirement confidence remains historically low
The survey found only 14 percent of workers are very confident they will have the money needed to live comfortably in retirement.
Perhaps it is not surprising then that today's workers expect to stay employed longer. While only 11 percent of workers in 1991 expected to work past age 65, the most recent survey discovered 37 percent believe they will be working beyond that age.
However, some workers may find they have limited say in when they retire. The 2012 survey found half of current retirees left the workforce for reasons outside their control such as disabilities or downsizing.
Retirement savings not a priority
Workers may not feel prepared for retirement because many are not actively planning for it. Only 19 percent of workers feel very confident they are doing a good job preparing for retirement. Moreover, 56 percent of workers say they and/or their spouse have not tried to calculate how much they will need in retirement savings in order to live comfortably.
In addition, only 58 percent of workers are currently saving for retirement. Income appears to play a significant factor in whether a worker has saved money. Of those with household incomes greater than $75,000 annually, 93 percent have saved for retirement, compared to 35 percent of those earning less than $35,000.
For retirees, only slightly more than a quarter feel very confident they did a good job preparing for their retirement. Social Security is identified as a major source of income by 69 percent of current retirees.
Workers insecure about jobs
Even as the economy apparently recovers, many workers also feel insecure about employment stability. Of survey respondents, 42 percent cite job insecurity as the biggest financial issue facing workers today.
Workers may be keenly aware of their employment situation since many are apparently ill-prepared to face a period of unemployment. The survey found many workers have little, if any, savings. More than 60 percent of workers said they have less than $25,000 in savings accounts and investments. At the same time, 20 percent of workers say their level of debt poses a major problem.