The Employee Benefit Research Institute recently published their results from their 2007 Retirement Confidence Survey [pdf]. It casts a dark cloud over the state of retirement savings. Here’s a summary of some of the findings.
Half of workers less confident about pension benefits. While half of all workers have less confidence in pension, they do not “react constructively.” They will rely on 401(k) and savings, but are ignoring professional investment advice offered to them.
Many workers counting on benefits that won’t be there. 41% of workers say they have or their spouse has a pension plan, but 62% of workers expect to receive income from such plans. How will they receive income from a plan they don’t have?
Most savings levels are modest. Almost half of workers have total savings and investments of less than $25,000. 70% of those without retirement savings have monetary assets totaling less than $10,000.
Continued ignorance about Social Security coverage. A small percentage of workers are aware of the age at which they can receive full retirement benefits from Social Security without a reduction for early retirement.
If you’re reading this blog, chances are you’re already in better shape than the average survey respondent. The second point above amazes me. I’ve heard that 80% of drivers believe they’re above average, which is kind of humorous, but how do people expect to receive income from a pension they don’t have? Are they hoping that some day before they retire they’ll work for a company that offers one?
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4:01 pm (reply)
The EBRI sure has had a lot to say over the years, but what do they say to a boomer who earns minimum wage, has no retirement plan, no assets, and student loan debt.
I’m not counting on benefits that won’t be there. I expect destitution.
8:50 am (reply)
Yes, it’s foreboding, but it should serve not as “doom and gloom” but more of a wake-up call.
12:58 pm (reply)
I’m awake, but with my meager earning power, I don’t expect to be able to build a nest egg.
8:01 pm (reply)
I ran across a related article a while back talking about similar studies. It was on Vanguard and talks about the gradual shift from pensions to contribution plans.