About three-quarters of the nation’s workers and retirees think they’ll be able to live comfortably in retirement, an increase from how they felt at the beginning of the pandemic last year, according to a survey released yesterday.
The 31st Annual Retirement Confidence Survey, conducted in January by the Employee Benefit Research Institute (EBRI) and Greenwald Research, shows increased optimism among workers and retirees on a variety of factors related to retirement.
Eight in ten retirees think they’ll have enough money to live comfortably throughout retirement (similar to 76% when the survey was last fielded in March 2020), and one in three are very confident. Six in ten retirees indicate their overall expenses and spending are as expected. More than one quarter (26%) say their expenses and spending are higher than expected, but that’s down from 34% in 2020.
Curtailed travel, leisure and entertainment during the pandemic — retirees’ top priorities for discretionary spending — may have led to lower spending, said Lisa Greenwald, CEO of Greenwald Research and co-author of the report. “The survey shows retirees prioritize asset preservation and do not like the idea of spending down,” she added.
Working Americans have also become increasingly optimistic. According to the survey, 72% express confidence in their ability to retire comfortably, up 3 percentage points from last year. Only 22% of workers have adjusted the age at which they plan to retire because of the pandemic and its economic impact. This includes 17% who plan to retire later.
According to the survey, confidence in Social Security and Medicare are also at all-time highs since the Annual Retirement Confidence Survey was first conducted in 1990.
Nearly three-quarters of retirees (72%) and more than half of workers (53%) are confident that Social Security will continue to provide benefits of at least equal value to those received today. Three in four retirees and nearly six in 10 workers hold this same view about Medicare. EBRI described this as remarkable in a year that’s been marked by mass health concerns, especially among older people.
Workplace Retirement Savings Plans
More than four in five workers (80%) who are offered a workplace retirement savings plan say they are satisfied with it, the survey also shows. Among the three in 10 workers who made changes to their plan in the past year, six in ten say they increased the amount they contribute and one in four say they reduced or stopped contributions.
A quarter of workers who participate in a workplace retirement savings plan would like to see more investment options designed for post-retirement, according to the survey. Approximately three-quarters of those with workplace retirement plans expressed interest in putting a portion of their plan savings into an investment option that would provide guaranteed monthly income for life.
The survey results weren’t all positive. “While resilience may be the watchword for 2021, three in ten workers say the pandemic has negatively impacted their ability to save for retirement, due to reduced hours, income or job changes,” said Craig Copeland, EBRI senior research associate and co-author of the report.