Amid what many have identified as a crisis in retirement readiness, Americans with access to defined contribution plans feel more confident about their retirements than ever before according to one long-running survey of plan participants.
In “Inside the Minds of Plan Participants,” a study released in October by Alliance Bernstein, a survey of more than 1,000 retirement plan participants found confidence in retirement readiness at an all-time high earlier this year.
When the survey was fielded in May, 47 percent of respondents felt confident about their ability to retire, up from 32 percent of respondents in last year’s survey and 25 percent of respondents in 2016.
Since Alliance Bernstein started surveying participants in 2005, the proportion of respondents feeling confident about their retirement chances has exceeded 40 percent just one time before—in 2007, ahead of the global financial crisis. Two years later in 2009, retirement confidence hit an all-time low, when 18 percent of the survey respondents said they were ready to retire.
Jennifer DeLong, head of defined contribution at Alliance Bernstein, argued that the confidence could be due to economic and market conditions.
“The survey was fielded back in May before we hit the recent volatility; the economy has been really good, capital markets are doing well and unemployment is at low levels,” said DeLong. “It’s great that people are more confident, but is that a false sense of confidence?”
Despite that feeling of reassurance, many plan participants voiced doubts about the timing of their retirement. Two-fifths of those in the survey said they would either work part time in retirement or delay their retirement date altogether. Almost half, 46 percent, said the reason for their confidence or lack thereof was that they had some retirement savings but needed to save more.
As it turns out, many retirees regret not saving more when they were fully employed. From its survey, Alliance Bernstein broke out a group of 109 plan participants who had already retired, asking them what they would do differently if they had the opportunity to plan for their retirement again. Forty-seven percent said they would save more for retirement from their monthly earnings.
The next largest regret among the retirees was that they had not maintained their health. Twenty-seven percent of retired plan participants wished they had taken better care of themselves while preparing for retirement.
This year, Alliance Bernstein’s survey included an eight-question quiz to determine financial literacy—over two-thirds of the respondents failed the quiz.