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Spectrum Staff
Reflecting
the growing concern over healthcare costs and economic issues, American
workers’ confidence in being able to afford a comfortable retirement
decreased over the past year by a rate unmatched in 18 years of the
Retirement Confidence Survey (RCS), according to results released
last week.
The percentage of workers very confident about having enough money for a comfortable
retirement decreased sharply, from 27 percent in 2007 to 18 percent in 2008,
the biggest one-year drop in the 18-year history of the survey.
Retiree confidence in having a financially-secure retirement also decreased,
from 41 to 29 percent, a drop of 12 percentage points. Decreases in confidence
occurred across all age groups and income levels but was particularly acute among
younger workers and those with lower incomes.
RCS results indicate that healthcare costs in particular have become a big concern
for retirees. Among retirees who left the workforce earlier than planned, more
than half say they did so because of health problems or disability.
Almost half of all retirees say they have spent more than expected on healthcare
expenses. Fifty-four percent say they are now more concerned about their financial
future than they were right after they retired, a 14 percentage-point increase
from a year ago (40 percent in 2007).
“In the nearly two decades we have been conducting the RCS, this year’s
results show a very dramatic reduction in the public’s confidence about
having a comfortable retirement. The economy and health costs are major concerns,” said
Dallas Salisbury, president of the nonpartisan Employee Benefit Research Institute
(EBRI), which conducted the survey with Mathew Greenwald & Associates.
“If there is a silver lining, it’s that Americans finally may be
waking up to the realities of being able to afford retirement,” said Salisbury.
In addition, the survey found that about half of workers say they and/or their
spouse have tried to calculate how much money they will need for a comfortable
retirement, up considerably from the low point of 29 percent measured in 1996.
As before, the 2008 survey finds that doing a retirement savings calculation
is particularly effective at changing worker behavior: 44 percent who calculated
a goal changed their retirement planning, and of those, almost two-thirds started
saving or investing more.
This page and its contents ©2008
Metropolitan News Company, Inc.
