61% Of Workers Are Confident They Will Have Enough Money For Retirement, Down From 70% In 2007; Economy, Health Care Costs Major Concerns, Survey Find

Main Category: Seniors / Aging
Also Included In: Public Health
Article Date: 10 Apr 2008 - 11:00 PDT

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U.S. residents are becoming increasingly concerned that they will be unable to save enough money to live comfortably during their retirement as a result of rising health care costs and the slowing economy, according to the Employee Benefit Research Institute's annual survey, the AP/San Francisco Chronicle reports. For the survey, research firm Mathew Greenwald & Associates conducted telephone interviews with more than 1,320 people ages 25 and older. The survey had a margin of sampling error of plus or minus three percentage points. The survey found:

• 61% of respondents said they are "very confident" or "somewhat confident" of having enough money for retirement, the lowest percentage since 2001 and down from 70% in 2007;
  
  
• Respondents who said they are "very confident" decreased from 27% last year to 18% this year, the largest decrease in the 18-year history of the survey;
  
  
• 22% of respondents currently working said they are concerned about not having enough savings to cover medical expenses during retirement, while 27% are concerned about long-term care costs;
  
  
• 15% of retired respondents said they are worried they did not have enough savings to cover medical expenses, and 28% said they are concerned they did not have enough savings to pay for long-term care (Alt Powell, AP/San Francisco Chronicle, 4/8);
  
  
• 33% of respondents currently working said they expect to have access to employer-paid health insurance in retirement, compared with 41% in 2007(Greene, Wall Street Journal, 4/9); and
  
  
• About 50% of workers have saved less than $25,000 for their retirement, 24% have saved $25,000 to $99,999, 15% have saved $100,000 to $249,999 and 12% have saved $250,000 or more, not including the value of primary residences or pensions.

Reaction
Jack VanDerhei, a Temple University business professor and a co-author of the study, said, "I think more workers are beginning to factor in all the various information they've been given, especially the need for additional retirement funds just for the health care component" (AP/San Francisco Chronicle, 4/8). VanDerhei added that the presidential campaign likely is contributing to the results. "It's the first time in at least four years you're getting the constant drumbeat (in the media) that health expenses are going to be a problem going forward," he said, adding, "The candidates are talking about the future solvency of Medicare and employers' cutting down on retiree health coverage" (Wall Street Journal, 4/9).

EBRI President Dallas Salisbury said, "The economy and health costs are major concerns," adding, "If there is a silver lining, it's that Americans finally may be waking up to the realities of being able to afford retirement" (AP/San Francisco Chronicle, 4/8).

According to the St. Petersburg Times, researchers say the drop in confidence "may not be a bad thing." VanDerhei said that in the past, "people were relatively confident they'd have enough money, but if you looked at what assets they had, it was just pathetically low," adding, "The good news is that false optimism has started to evaporate. The bad news is that it hasn't translated into a lot of increased retirement savings."

According to the Times, "Confidence levels have been affected by the downturn in the economy, particularly the decline in home values and stock prices and the rise in unemployment," with workers becoming "more aware of problems in their traditional safety nets." In addition, fewer workers "expect Social Security and Medicare to provide them with the same level of benefits current retirees receive," the Times reports (Huntley, St. Petersburg Times, 4/9).

An executive summary of the survey is available online.

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