2009 retirement confidence survey: summary of key findings employee benefit research institute 1100...

2009 Retirement Confidence Survey:2009 Retirement Confidence Survey:

Summary of Key FindingsSummary of Key Findings

Employee Benefit Research Institute1100 13th Street NW, Suite 878

Washington, DC 20005Phone: (202) 659-0670 Fax: (202) 775-6312

Mathew Greenwald & Associates, Inc.4201 Connecticut Ave. NW, Suite 620

Washington, DC 20008Phone: (202) 686-0300 Fax: (202) 686-2512

Presented to ASEC, April 15, 2009Mathew Greenwald

Mathew Greenwald & Associates

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey

2

Retirement Confidence Has Dropped to its Lowest Recorded Level

Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years? (2009 Workers n=1,001)

18% 25% 21% 24% 25% 24% 27%18% 13%

55% 47%45% 44% 40% 44% 43%

43%41%

19% 18%17% 18% 17% 17% 19%

21%22%

10% 16% 13% 17% 14% 10%16% 21%

6%

1993 2000 2003 2004 2005 2006 2007 2008 2009

Very Somewhat Not too Not at all Don't know/Refused


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75%70%

58%63%

68%

45%49%

69%68%

58% 58%57%

Ages 25-34 Ages 35-44 Ages 45-54 Ages 55+

2007 2008 2009

The Decline in Retirement Confidence is Steeper Among Older Workers

Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years?

Percentage Very or Somewhat Confident


4

52%

87%80% 82% 85%

95%

86%80%

85%

73%

35%

93%

75%77%

63%

40%

60%

91%

<$25,000 $25,000-$99,999

$100,000-$149,999

$150,000-$249,999

$250,000-$499,999

$500,000 ormore

2007 2008 2009

Workers with $25K to $150K Exhibit the Largest Decline in Retirement Confidence




5

85%

50%

59%

74%

49%

61%

Have done calculation Have not done calculation

2007 2008 2009

Those Who Have Done a Savings Calculation Lost More Retirement Confidence Than Those Who Did Not




6

Confidence in Preparing Financially Has Declined Only SlightlyHow confident are you that you (and your spouse) are doing a good job of preparing financially for your retirement? (2009 Workers n=1,001)

21% 26% 28% 24% 26% 26% 25% 26% 23% 20%

47%46% 49%

45% 47% 46% 50% 45% 48% 49%

18% 17% 13%15% 14% 12% 14% 15% 16% 16%

12% 10% 10% 14% 12% 16% 12% 13% 12% 14%

1993 1996 2000 2003 2004 2005 2006 2007 2008 2009

Very Somewhat Not Too Not At All Don't Know / Refused


7

Feelings of Financial Mastery and Belief in Equities as Long Term Investments Have Taken a HitPlease tell me how well each of the following statements describes you? (2009 Workers n=1,001)

38%

35%

32%

24%

0%

28%

22%

17%

34%

35%

39%

39%

40%

38%

31%

72%

70%

71%

63%

68%

61%

48%

Very well Well

1998

2000

2002

2009

1998

2000

2002

2009

I think anyone can have a comfortable retirement, if they just plan and save.

Over the long run, I believe stocks in general

will be a very good investment.

N/A


8

Interest in Financial Planning Has Declined as the Need Has IncreasedPlease tell me how well each of the following statements describes you? (2009 Workers n=1,001)

0%

23%

19%

17%

3%

7%

4%

9%

39%

38%

31%

8%

8%

10%

12%

62%

57%

48%

12%

15%

13%

21%

Very well Well

I think preparing for retirement takes too much

time and effort.

I enjoy financial planning.

1998

2000

2002

2009

1998

2000

2002

2009

N/A


9

Almost Three in Ten Think They Have Altered Their Target Retirement Date

32%

18%

Percent Yes

2003 2008 2009

28%

75%

25%

79%

18%

89%

9%

Later, at an older agethan before

Sooner, at a youngerage than before

2003 2008 2009

In the past 12 months, has the age at which you expect to retire changed? (2009 Workers n=1,001) If yes: Do you now expect to retire…? (2009 Workers who changed retirement age n=304)


10

The Poor Economy Heads the List of Reasons Why Workers Say They Are Postponing RetirementWhy has your expected retirement age changed? (Among workers changing their retirement age, n=304) (Top mentions, multiple responses accepted)

Poor economy 36%

Need to make up for losses in stock market 28%

Want to make sure have enough money 24%

Job loss, change in employment 10%

Cost of living higher than expected 9%

Uncertainty about stock market 7%

Need to pay bills/expenses/new purchases 6%


11

Realistically, at what age do you expect to retire? (2009 Workers n=1,001)

22%

28%

31%

11%

1%

6%

30%

6%

10%

16%

21%

25%24%

11%

21%

24%

31%

23%

17%

9%

Before 60 60-64 65 66 or older Never retire

1994 2003 2008 2009

The Proportion of Workers Expecting to Retire After Age 65 is Growing More Slowly Recently Than Perceptions Indicate


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Did you retire earlier than you planned, later than you planned, or about when you planned? (2009 Retirees n=256)

48%45%

39%

45%

39%37% 38% 37%

51%47%

40%

1996 1998 2001 2002 2003 2004 2005 2006 2007 2008 2009

Earlier than Planned

Almost Half of Retirees Left the Workforce Before They Planned


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46%

12%

14%

10%

14%

42%

35%

34%

23%

22%

18%

13%

1999

2009

Did you retire earlier than you planned because…? (2009 Retirees retiring earlier than planned n=121) (Percentage saying yes)

People Retire Early for a Variety of Reasons, Many Beyond Their Control

You could afford to retire earlier than planned

There were changes at your company, such as downsizing or closure

You had a health problem or disability

You wanted to do something else

You had to care for a spouse or another family member

You had another work-related reason

Changes in the skills required for your job

(2007: obsolete)

NA

NA


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More Workers Plan to Work for Pay in Retirement than Retirees ReportDo you think you will do any work for pay after you retire? (2009 Workers n=1,001) Have you worked for pay since you retired? (2009 Retirees n=256) (Percentage saying yes)

56%

63%

70% 68% 66% 67% 66%63%

72%

34%

25%

37%

27%26%32%

28%22%22%

1998 2000 2003 2004 2005 2006 2007 2008 2009

Workers Retirees


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Fewer Retirees Say They Worked Because They Enjoyed ItIs the following a major reason, a minor reason, or not a reason why you worked for pay after you retired? (2009 Retirees who worked for pay n=100)

26%

25%

30%

28%

52%

74%

52%

62%

26%

25%

31%

27%

24%

17%

27%

31%

52%

50%

60%

55%

76%

91%

79%

93%

Major Reason Minor Reason

Wanting to stay active and involved

Enjoying working

Wanting money to make ends meet

Wanting money to buy extras

2008

2009

2008

2009

2008

2009

2008

2009


16

More Retirees Saw a Decrease in the Value of Their Savings/InvestmentsIs the following a major reason, a minor reason, or not a reason why you worked for pay after you retired? (2009 Retirees who worked for pay n=100)

14%

20%

9%

11%

27%

25%

35%

37%

10%

11%

21%

14%

16%

12%

17%

18%

24%

31%

31%

24%

43%

37%

52%

54%

Major Reason Minor Reason

A job opportunity

A decrease in the value of your savings or investments

Keeping health insurance or other benefits

Trying a different career

2008

2009

2008

2009

2008

2009

2008

2009


17

Have you (or your spouse) tried to figure out how much money you will need to have saved by the time you retire so that you can live comfortably in retirement? (2009 Workers n=1,001)

48%53%

43% 42% 42% 42% 43%47%

44%

32%

45%51%

37%

1993 1999 2000 2003 2004 2005 2006 2007 2008 2009

Respondent Respondent and/or Spouse

Less Than Half of Workers Report Doing a Retirement Needs Calculation


18

How did you (or your spouse) determine this amount? Did you…? (Workers who gave amount needed for retirement n=871)

5%

7%

9%

18%

26%

44%Guess

Read or hear that is how much needed

Fill out a worksheet or form

Use an online calculator

Do your own estimate

Ask a financial advisor

The Plurality Guess at How Much They Will Need


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How much did you (or your spouse) calculate you would need to accumulate IN TOTAL by the time you retire? If haven’t calculated: How much do you think you (and your spouse) will need to accumulate IN TOTAL by the time you retire so that you can live comfortably in retirement?

28%

19%23%

8% 8%11%

30%

14% 15%

8%

17%15%

Under $250,000 $250,000-$499,999

$500,000-$999,999

$1,000,000-$1,499,999

$1,500,000 ormore

Don'tknow/Don'tremember

All Workers (n=1,001) $75,000 or more (n=391)

Many Think They Need Little in Savings to Live Comfortably in Retirement


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Implications

• Reduction in confidence provides a better, but also more difficult, context for education– Key question: How to use this opportunity

• The decision of when to retire is critical

– For many, staying in the workforce longer is a key to retirement security

– The decision about when to claim Social Security has risen in importance


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Implications (continued)

• Need to focus attention on helping people understand how “much” sustainable lifestyle they can get from their current asset levels plus savings at current levels

– This may lead to more effective retirement and perhaps savings decisions

• Need to focus attention on helping people understand the importance of having “sufficient” assets at the older ages and the penalty of running out of assets

2009 retirement confidence survey: summary of key findings employee benefit research institute 1100...

Documents

retirement age n

retirement years

workers n

retirement confidenceoverall

comfortable retirement

expected retirement

retirement confidence

target retirement datein