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.
