Retirement Fears Remain at Historic High
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The Fiscal Times
March 13, 2012

If securing the American Dream includes a comfortable and financially secure retirement, the economy is failing nearly half of all American workers, a new survey shows.

The longest running annual survey of American attitudes toward retirement and retirement security, conducted every January by the Employee Benefit Research Institute, showed just 52 percent of Americans are very or somewhat confident that they will have enough money to live comfortably after quitting work. Despite the continuing economic rebound over the past year, it represented an insignificant change from the record low numbers expressing confidence in their ability to retire a year ago.

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When the question changed from living comfortably to financial security, things appear to be getting worse, despite an improving stock market. The number of people who were very confident they will have a financially secure retirement in January fell to 21 percent from 24 percent a year earlier, while the number who are not at all confident rose to 19 percent from 17 percent in January 2011. While the changes weren’t statistically significant, the trend was definitely in the direction of greater financial insecurity.

“There’s less false optimism in 2011 and 2012 than they had been in prior years,” said Mathew Greenwald, whose polling firm conducted the survey for EBRI. “There is an increased awareness among those who are not on track (to reach their retirement goals) and their confidence went down.”

The deterioration in retirement security is a long-running trend. The 22 years that EBRI has conducted its poll has been an era marked by declining job security, disappearing defined benefit pension plans and constant questioning about the viability of government retirement programs like Social Security and Medicare. Indeed, a generation ago, early retirement was a goal for many Americans. Today, fully 37 percent of workers expect to work past 65 compared to just 11 percent in 1991.

The Great Recession has had a devastating on families saving for retirement, according to the survey, especially among those in the lower wage brackets. Sixty-six percent of workers reported they or their spouses had something put away for retirement in 2011, which was down from 75 percent in 2009. And just 58 percent in 2012 are putting money into retirement savings plans compared to 65 percent in 2009. Virtually all the decline was seen in households earning under $35,000 a year.

Though other polls taken within the past year have showed saving for retirement is the number one financial issue for nearly half of Americans, the EBRI poll suggested otherwise. Fully 42 percent of its respondents said the uncertain job market was their number one issue.
“Retirement is not Americans primary concern right now,” said Jack VanDerhei of EBRI. “Their concern is job security.”

The poll did have one curious finding. Despite escalating talk in Washington about the need to curb entitlement programs like Social Security and Medicare, workers expressed more confidence this year than last that those programs would provide today’s level of benefits when they retire. Fully 59 percent of workers were either somewhat or very confident that Social Security would provide them with benefits at least equal to benefits received by retirees today, a significant jump of 10 percent points from a year ago.

Employees have long recognized that Medicare faces far more difficult long-term financing problems. But even there fear of the future is falling. The number who said they were not at all confident or not very confident that Medicare would provide the same level of benefits for their retirement as it does for current retirees fell from 70 percent in 2011 to 64 percent in 2012. Over the last two decades, those lacking confidence in Medicare’s ability to sustain benefits has never fallen below 61 percent.

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.