Economic Recovery Does Little To Bolster Retirement Confidence
Those facing retirement or already retired in the U.S. are not feeling confident about the economy recovery in the United States. THe Employee Benefits Research Institute (EBRI), in its 23rd annual Retirement Confidence Survey, revealed that retirees were negatively impacted by the economic recession and did not plan as effectively for their financial needs during retirement as they should have. Over half the respondents reported having less than $25,000 saved.
The 2013 EBRI results reflect a reduction in confidence about retirement even with reports of economic recovery among the 1,003 working adults and 261 retirees included in the survey. EBRI's Center for Research on Retirement Income's co-director, Nevin Adams, explained, "Confidence dipped after 2007, and it's been sliding since then." Less than a quarter of the 251 retirees surveyed express confidence in having the financial wherewithal to cover expenses, an 11 percent decrease from 2011.
At the crux of the lack of confidence is worry about future employment, with the majority of respondents reporting uncertainty in the job market as their primary concern. The number of people expecting to rely heavily on Social Security for retirement has increased t0 70 percent--up 15 percent since 2007, while the number of people planning to work past the age of 65 has increased from 11 percent two decades ago to 36 percent.
While the economy plays a role in the lack of confidence workers and retirees have about economic recovery, the survey also revealed that planning for retirement is a weak area for many. Only 46 percent of the working and retired respondents said they have determined how much they will need to meet their needs during retirement, and most people do not understand what they will need when they retire.
To better prepare for retirement, people should both take a more realistic look at what they will need to afford once they stop working as well as how much they need to save to be prepared.
Produced by IBM's Midsize Insider, based on Reuters reporting