Thirty-six percent of workers aged 55 and older surveyed by the Employee Benefit Research Institute (EBRI) report having less than $10,000 in savings and investments.
Excluding the value of their homes and any defined benefit pension plans, 57 percent of all respondents that participated in EBRI’s Retirement Confidence Survey report less than $25,000 in total household savings and investments, and almost half of those (28%) have less than $1,000 saved.
In addition, the percentage of workers currently saving for retirement has continued to declined to 57 percent from 65 percent recorded in 2009.
As a result, worker’s confidence in their ability to live comfortably throughout retirement remains low, with 28 percent of workers reporting they are not at all confident. This is an increase of 5 percent from last year and the highest level recorded in the 23 years the EBRI has been conducting the survey.
“The recent low levels of retirement confidence may be, at least partly, the result of the increasing awareness of the challenges many Americans face in trying to achieve a financially secure retirement,” says Jack VanDerhei, EBRI research director, and co-author of the report.
Immediate financial issues take precedence over saving for retirement. Day-to-day living expenses and too much debt hinder workers ability to save for the future.
Workers cite an inability to determine just how much money they will need for retirement. Almost half of workers age 45 and older have not tried to calculate how much money they will need to have saved for a comfortable retirement, according to EBRI. Those that did complete a retirement-savings-needs-calculation had more confidence about their ability to put money aside and had higher savings goals than those who had not done the calculation.
Just 23 percent of workers sought investment advice from a financial advisor, and of those, over a quarter did not follow all the advice given, according to the survey.
“Even with this low level of savings, in the past 12 months, one in three workers withdrew money from their savings to pay for current expenses,” says Mathew Greenwald, president Greenwald & Associates.
To compensate for their lack of retirement funds, workers plan on delaying retirement. Thirty-six percent expect to wait until after age 65 to retire. This is a significant increase from the 11 percent of workers who expected to retire after age 65 when the survey was first conducted in 1991. Additionally, 69 percent of respondents said they plan to find paid employment once retired from their primary job.