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The Reality of Retirement Today: Lessons in Planning for Tomorrow
EBRI Issue Brief #181
Paperback, 16 pp.
PDF, 524 kb
Employee Benefit Research Institute, 1997
- The 1996 Retirement Confidence Survey, co-organized by the Employee Benefit Research Institute, Mathew Greenwald and Associates, and the American Savings Education Council, focuses on the realities of life for current retirees and implications for current workers.
- One-fifth of retirees have experienced a decline in their standard of living since they retired. One-fifth expect their lifestyle to worsen over the coming years. For many, retirement reality has not matched expectations, and one-quarter are not confident in their prospects for the remainder of their retirement. This represents a lack of confidence in their own financial preparation and a lack of faith in Social Security and Medicare. These findings should serve as a reality check for workers who need to plan now for retirement.
- Workers' confidence in their retirement income prospects dropped 12 percentage points over the past year. If this drop signifies that workers are being more realistic about their prospects and may be coming to terms with what they need to do to secure their own retirement income security, it is a good sign.
- Many workers are saving for retirement; however, this saving is not based on a plan designed to achieve a calculated goal. Only one-third of workers have tried to determine how much they will need to have saved by retirement so that they can live comfortably. Only one-third of these were very confident that they had determined an accurate figure. Furthermore, when asked how much they calculated that they would need to save, 42 percent could not give an amount. Therefore, less than 20 percent actually had a specific number with which to work.
- Americans are pessimistic regarding the Social Security system in its current state and its ability to maintain benefit levels into the future. At the same time, they are generally opposed to any form of benefit cuts and/or tax increases (except for higher income retirees). What types of changes would they accept? Apparently, they would accept investment of trust fund assets in private equity markets and/or the creation of individual Social Security 401(k)-like accounts as part of the system.
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