EBRI Issue Brief

Are Workers Kidding Themselves? Results of the 1995 Retirement Confidence Survey

Dec 1, 1995 12  pages


  • While three-quarters of American workers are confident regarding their retirement income prospects, many should probably evaluate their situation to determine whether their confidence is justified. Many, but not all, American workers recognize the need to save (among those confident, 30 percent have nothing saved for retirement); however, most have not gone the next step and developed a saving plan based on a target. Among confident savers, 60 percent have not tried to calculate how much they will need to save to fund a comfortable retirement lifestyle.
  • These are some of the highlights from the 1995 Retirement Confidence Survey. This Issue Brief discusses key findings from the survey, including workers' confidence, and potential false confidence, regarding retirement income prospects; worker knowledge of retirement finance issues; employer efforts to educate participants in 401(k)-type plans; worker and retiree attitudes on issues concerning retirement; and the public's attitudes regarding Social Security and Medicare.
  • Survey findings indicate that, among workers with 401(k)-type plans, participant education does impact decisionmaking. Two-fifths of participants who utilized plan-provided educational material reported that it led them to increase their contributions. Almost one-half indicated that the material led them to change their asset allocations in the plan. While workers with less formal education are less likely to utilize educational material that is provided, when they do use the material they are equally or more likely to alter their behavior as a result.
  • While workers believe their lifestyle will improve in retirement, retirees believe their lifestyle in retirement has declined. The 26 percent of workers describing their current lifestyle as "just making ends meet" declines to 16 percent when these respondents are asked about their expected retirement lifestyle. Among retirees, a larger proportion indicate they had a "very comfortable" lifestyle before retirement (18 percent) than during retirement (13 percent), and a larger fraction classify their current lifestyle as "struggling to get by" (10 percent) than classify their preretirement lifestyle in that manner (7 percent). The fact that workers generally expect to be better off in retirement while retirees seem to have experienced the opposite further highlights the need for workers to develop thoughtful retirement saving plans.