The 2016 Retirement Confidence Survey report, based on interviews with 1,000 workers and 505 retirees and recently released by Employee Benefit Research Institute (EBRI), contains some surprising information.
According to Jack VanDerhei, EBRI research director and coauthor of the study, many Americans who haven’t been saving enough are taking a “particularly risky gamble.”
That’s because almost 40% of workers say they need to save at least a fifth of their current income to retire comfortably. But workers aren’t saving much; the retirement savings percentage peaked in 2009, and today fewer than two-thirds of workers save for retirement. Perhaps worse still, 42% of workers (and 27% of those age 55 or older) have less than $10,000 in savings and investments.
And many underestimate their future retirement expenses, such as food, taxes, and health care. How will these workers plan for tomorrow? Some 20% say they’ll save more later, 15% say they’ll work in retirement, 14% say they’ll retire later, and 13% just “don’t know.” As VanDerhei notes: “Better than one in four either [has] no idea what they’ll do or they’re just hoping they can, in essence, defer the pain.”
VanDerhei is particularly concerned about workers who believe they’ll work longer. According to the survey, 67% said they expect to work for pay after they retire; but in fact, only 27% of retirees do. The EBRI survey found that 50% of retirees had to retire earlier than expected, usually because of their health or their spouse’s health. “I view that,” he says, “as a particularly risky gamble.”