Earlier this week, the Employee Benefit Research Institute (EBRI) and public opinion research firm Mathew Greenwald and Associates released the results of the 2010 Retirement Confidence Survey (RCS). The survey, which has been conducted every year for the past two decades, is a nationwide poll of workers and retirees about their attitudes towards saving for retirement and their saving practices.
Many of the survey results support what we’ve been saying all along: people don’t save enough for retirement and they have a hard time saving for retirement. According to the survey, 42 percent of workers aged 45 and older have savings and investments under $25,000. Since 1993, the percentage of workers who are not confident about having enough money in retirement has almost doubled – from 25 percent to 46 percent. And more people expect to have to work longer. Mathew Greenwald stated
Twenty-four percent of workers in the 2010 RCS say that they have delayed their retirement age in the past year. And while the age at which workers plan to retire shows little change between 2009 and 2010, it has crept up incrementally over time. In particular, the percentage of workers who expect to retire after age 65 has increased from 11 percent in 1991 to 14 percent in 1995, 19 percent in 2000, 24 percent in 2005, and 33 percent in 2010.
Not surprisingly, the recent recession has caused “a significant long-term drop in the public’s view of stocks as an investment.” Seeing those 401(k) balances plummet over the last two years has truly been a wake-up call about the insecurity of these retirement savings vehicles.
Both EBRI’s survey and the latest edition of the National Retirement Risk Index from the Center for Retirement Research at Boston College illustrate in very different ways why retirement income must be a priority in this country. EBRI sees the results of its survey as an opportunity to educate workers about the need to save for retirement, about how much is needed in retirement, and about the importance of making sure your retirement money lasts. While these are important lessons, I don’t think they will begin to solve the nation’s retirement income crisis.
What else can be done? We need a new universal, secure, and adequate private retirement system, of course!