Americans More Confident In Retirement Than Three Years Ago
According to the 2016 Retirement Confidence Survey, roughly one in five American workers feel “very confident” about having enough money to live comfortably in their retirement. Of course, this equates to roughly 20 percent of the people. Funded by the Employee Benefit Research Institute, the survey indicated that only about 13 percent o the American workers had this kind of confidence three years ago.
Still, the percentage of American workers who feel, at least, somewhat confident, reached an astounding 63 percent, this year. But it is important to look at this number realistically.
“Among those who are confident about retirement, it’s overwhelmingly among those who have a retirement plan,” explains Jack VanDerhei, who co-authored this year’s survey. “Even if you control for discrepancies in age and income, the likelihood that a respondent is either somewhat or very confident that they will have enough money to live comfortably throughout their retirement years is 22 percentage points higher for those who have an IRA [individual retirement account], DC [defined contribution] plan, and/or DB [defined benefit] plan than their counterparts without a retirement plan.”
Breaking the numbers down more specifically, the Employee Benefit Research Institute found that the percentage of workers who are confident in their retirement options has been growing—and continues to grow—since the Great Recession. At least 21 percent are very confident this year; up, of course, from 13 percent in 2013. And at least 42 percent of workers are “somewhat confident,” which is up from 38 percent in 2013.
While the numbers are impressive—and in spite of what many would believe to be the opposite—retirement confidence was highest in the year 2000, at 78 percent. In 2009, retirement confidence was only slighly lower—at 75 percent—with its lowest, in recent years, reching 57 percent back in 1994.
At the same time, nobody can really pinpoint why confidence is higher. Some argue that more confidence in the housing market—which requires a long term investment that typically results in capital—might have something to do with it.
Luke Vandermillen, who is the vice president of Retirement and Income Solutions with retirement services provider Principal Financial Group, is one of the handful of longtime underwriters for the survey. He explains, “We’ve seen a decent amount of awareness around retirement issues, but the issue is whether that awareness translates into different behavior.”