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Americans confidence in retirement years remains low
WASHINGTON (3/27/12)--Immediate financial concerns such as job uncertainty and debt are causing more Americans' confidence in their ability to afford a comfortable retirement to stagnate at historically low levels, according to a new report. This could impact how credit unions help members plan for retirement. 

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The most pressing issue facing workers and retirees is job uncertainty, said the 22nd annual Retirement Confidence Survey (RCS).

"Americans' retirement confidence has plateaued at the lowest levels we've seen in two decades of conducting this survey," said Jack VenDerhei, research director for the Employee Benefit Research Institute (EBRI) and co-author of the report.   

Among the major finding in this year's RCS:

  • Confidence is stagnant: Only 14% of workers are very confident they will have enough money to live comfortably in retirement--which is statistically equivalent to the survey low of 13% measured in 2011 and 2009.
  • Employment insecurity looms large: Of the survey respondents, 42% identify job uncertainty as the most pressing issue facing Americans.
  • Concern about health costs: Worker confidence about having sufficient money to pay for medical expenses and long-term care expenses in retirement remains significantly below their confidence levels for paying basic expenses.
  • Little savings: Many workers report they essentially have no savings and investments. About 60% of workers report 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.
  • Workers' expected retirement age: About 25% of workers in the survey say the age at which they expect to retire has changed in the past year. In 1991, 11% of workers said they expected to retire after age 65. By 2012, that percentage has grown to 37%.
  • Retirees' experience: Regardless of retirement age expectations, half of current retirees surveyed said they left the work force unexpectedly because of health problems, disability or changes at their employer--such as downsizing or closure.
  • Reliance on Social Security: Retirees report they are more reliant on Social Security as a major source of their retirement income than current workers expect to be.
  • Expected versus actual pension income: Although 56% of workers and/or their spouses expect to receive benefits from a defined plan in retirement, only 33% report that they and/or their spouse have such a benefit with a current or previous employer.
  • Not calculating retirement needs: More than half of workers (56%) report they and/or their spouse have not tried to calculate how much money they will need to live comfortably in retirement.
  • Online technology: Only a minority of workers and retirees feel very comfortable using online technologies to perform tasks related to financial management. Relatively few use mobile devices such as smart phones or tablet computers to manage their finances. Only 10% of workers who use online technology say they are very comfortable obtaining advice from financial professionals online.
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