Washington (April 18, 2003) -- Despite continuing stock market woes and economic uncertainty, many Americans remain optimistic about their ability to retire comfortably, according to the latest report by Employee Benefit Research Institute and American Savings Education Council.
According to the annual Retirement Confidence Survey, 21 percent of workers feel very confident about having enough money to live comfortably in retirement, compared to 23 percent in 2002, while 45 percent feel somewhat confident, compared to 47 percent last year. On the contrary, the number of workers not at all confident that they will have enough money saved for retirement rose 6 percentage points increase, from 10 percent in 2002 to 16 percent in 2003.
However, one of the reasons workers' confidence remains relatively high is that many workers don't know how much money it takes to live comfortably in retirement -- 61 percent of workers and more than half (53 percent) of all worker households haven't calculated how much money they will need to save by the time they retire. Another reason many workers are optimistic about their retirement is that they're planning to work longer. Nearly a quarter (24 percent) of workers age 45 or older this year plan to postpone their retirement age, up 9 percentage points from 2002 (15 percent), mainly due to financial or economic concerns, EBRI reported.
In addition, many workers haven't been affected by the market decline, because they didn't have much, if any, money invested in the stock market. Almost half of all workers (48 percent) have no stocks or stock mutual funds, either inside or outside of a workplace retirement savings plan. The survey also found that 39 percent of workers who plan to retire think they can live comfortably in retirement on less than 60 percent of their current income. About half of workers expect they will need less than 70 percent of their pre-retirement income to live comfortably in retirement, while 17 percent anticipate needing 80 percent or more.
— WebCPA staff
