Americans' Confidence in Retirement Security Steadies; Preparation Continues to Decline

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As the U.S. economy begins to stabilize, employees’ and retirees’ faith in their retirement security is on the rebound, but their preparation for retirement continues to falter. This is one of the key findings from a survey of over 1,100 workers and retirees sponsored by Towers Watson and conducted by the Employee Benefit Research Institute (EBRI). The survey also examined the attitudes and behaviors of U.S. workers and retirees with regard to saving, retirement planning and long-term financial security.

Other Key Findings

• Only 69% of respondents report that they or their spouse have saved for retirement, down from 75% in 2009. And only 60% say they and/or their spouse are currently saving for retirement, down from 65% in 2009 (but statistically equivalent to percentages measured in other years).
• An increased percentage of workers report they have virtually no savings or investments. Among Retirement Confidence Survey workers who responded to the question, 27% say they have less than $1,000 in savings, up from 20% in 2009. In total, more than half of respondents (54%) report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.
• Many employees continue to be unaware of how much they need to save for retirement. Less than half (46%) of respondents report they or their spouse have tried to calculate how much money they will need to save for a comfortable retirement.
• Although the age at which workers report they expect to retire shows little change from 2009, the percentage of workers who expect to retire after age 65 has increased over two decades, from 11% in 1991 to 14% in 1995, 19% in 2000, 24% in 2005 and 33% in 2010.
• Americans continue to lack confidence in institutions. They are most likely to express confidence in private employers (23% of workers and 27% of retirees responding very confident) and least likely to feel confidence in the federal government (11% of workers and 8% of retirees). Just 19% of workers and 22% of retirees report they are very confident about banks, while 12% of workers and 13% of retirees say they are very confident about insurance companies.