Survey Finds Retirement Savings To Be Inadequate
About 70% of U.S. residents are either very or somewhat confident about their financial security in retirement, but 49% have saved less than $25,000, according to the Employee Benefit Research Institute's 17th annual Retirement Confidence survey, the Pittsburgh Post-Gazette reports.
The survey, conducted by Mathew Greenwald & Associates, involved 1,250 workers and retirees. The survey found that nearly 25% of those who are very confident about their financial security in retirement currently are not saving, and 37% have not calculated how much they will need.
A previous EBRI study estimated that a single worker retiring in 2016 and living to age 80 would need about $112,000 to pay for health care and medications in retirement.
According to the latest survey, about 66% of U.S. workers have saved for retirement, the lowest percentage since 1998. About 60% currently are saving for retirement, compared with 64% in 2006.
About 41% of workers said they or their spouses are covered by a defined pension plan through an employer, and 62% expect to be covered by one before retirement.
Jack VanDerhei, a Temple University professor and co-author of the report, noted that fewer employers are offering defined benefit plans, which provide monthly pension checks based on a worker's wages and length of service.
The survey found that of the 17% of workers who said their employer-sponsored retirement benefits had been reduced over the last two years, only 32% had been saving more to account for the reduction.
VanDerhei said, "I think to a very large extent they're deluding themselves."
Mathew Greenwald, president of the market research firm, said, "The environment has been changing more quickly than individuals have been able to adapt." He added, "People underestimate inflation. People underestimate how long they are going to live" (Boselovic, Pittsburgh Post-Gazette, 4/12).
The survey is available online. Note: You must have Adobe Acrobat to view the survey.