Despite a two-year pandemic, most American workers and retirees remain optimistic about living a comfortable life in retirement, according to the 32nd EBRI Retirement Confidence Survey released today.

But that doesn’t mean that inflation and the cost of living aren’t taking their toll. In fact, they were cited most often as the reason respondents feel less confident about retirement prospects, according to the study, which was conducted by the Employee Benefit Research Institute (EBRI) and Greenwald Research.

“Even with the concerns of the pandemic and rising prices, overall, American workers and retirees still feel positive about their retirements,” said Craig Copeland, director of wealth benefits research at EBRI.

Over 70% of workers were at least somewhat confident about their retirement prospects, including almost 30% who were very confident. Retirees also remained confident, with nearly 80% confident they will have enough money to live comfortably throughout retirement, including a third who are very confident.
The majority of retirees also reported that their lifestyle and spending in retirement for the most part tracks what they were expecting. At the same time, however, 30% said they are finding that expenses in retirement are higher than expected.

Compared with 2021, a larger share of retirees also reported that their spending on housing is higher than they expected and more indicate that spending on travel and leisure are also more costly than they anticipated. 

“This could reflect increased use and desire for travel and leisure as the pandemic lulls. It can also reflect inflation and the increased cost of travel and entertainment for some,” said Lisa Greenwald, CEO of Greenwald Research.

“While it is hard to know which reason is driving the higher expenses, a strong majority of retirees still feel their retirement lifestyle and spending are on track,” she added.

Not surprisingly, having savings bolsters retiree confidence, the survey found. Almost three-quarters of retirees who felt more confident in their ability to live comfortably through retirement since Covid said it was due to having money in savings or having "good" investments.

Nearly 70% of retirees said that the “Covid-19 pandemic has not changed their confidence in their ability to live comfortably throughout their retirement.” In contrast, only half of workers said the pandemic didn’t impact their comfort in retirement.

At the same time, many Americans don’t know where to go or who to trust for financial and retirement planning information, EBRI found. “Almost four in 10 workers and two in 10 retirees say they don’t know who to go to for financial and retirement planning advice. Many turn to non-professional sources, like family and friends (35% of workers and 21% of retirees) or go online to do their own research (29% of workers and 23% of retirees),” the study stated.

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