Good News- Worker Retirement Confidence Down in 1996

Findings from the 1996 Retirement Confidence Survey

Worker confidence in their retirement income prospects dropped sharply over the past year according to the 1996 Retirement Confidence Survey. While such a drop could have many causes, a distinct possibility is that the constant drumbeat of attention given to need for baby boomers to save for their retirement has begun to register with workers. As a result, they may have evaluated their situation and are not pleased. If this dose of realism motivates action, then the drop in confidence is actually good news.

• Only 5 percent of working Americans think that most people in the United States save enough money to live comfortably throughout their retirement years.
• In 1996, 19 percent of workers were very confident that they will have enough money to live comfortably throughout retirement compared with 22 percent in 1995. An additional 43 percent were somewhat confident in 1996 regarding their retirement income prospects compared with 52 percent in 1995. Thus total confidence dropped 12 percentage points over the past year.
• Only 35 percent say they have "a great deal of control" over accumulating enough money for retirement.
• Sixty-one percent of workers expect money they save through a retirement plan at work to be the most important or a major source of retirement income for them. Fifty-six percent expect other personal savings and investments to be the most important or a major source of retirement income.
• Twenty-three percent of workers expect Social Security not to be a source of retirement income for them and an additional 50 percent expect it to be only a minor source.
• Two-thirds of workers have money set for retirement that they saved on their own on a regular basis. One-third do not.
• Only one-third of workers have tried to determine how much money they need to have saved by the time they retire to live comfortably. Forty-two percent of those who have tried can not give a figure when asked how much they figured the amount to be.
• While only 26 percent of workers are very confident in their ability to develop a good financial plan, 45 percent are very confident in their ability to stick to a regular financial plan.
• Twelve percent of workers say that they are saving a lot of money for retirement; an additional 39 percent say they regularly save money for retirement; and another 11 percent say that every now and then they save money for retirement.
• Forty-six percent of workers plan on retiring before age 65.
• Two-thirds of workers expect to work on a part-time basis in retirement. Nineteen percent say if will be out of financial necessity and 20 percent say it will be to supplement other income.