2013 Retirement Confidence Survey: Perceived Savings Needs Outpace Reality for Many

Source: Ruth Helman, Nevin Adams, Craig Copeland, and Jack VanDerhei, Employee Benefit Research Institute, EBRI Issue Brief #384, March 2013

From the summary:
• The percentage of workers confident about having enough money for a comfortable retirement is essentially unchanged from the record lows observed in 2011. While more than half express some level of confidence (13 percent are very confident and 38 percent are somewhat confident), 28 percent are not at all confident (up from 23 percent in 2012 but statistically equivalent to 27 percent in 2011), and 21 percent are not too confident.

• Retiree confidence in having a financially secure retirement is also unchanged, with18 percent very confident and 14 percent not at all confident.

• One reason that retirement confidence has remained low despite a brightening economic outlook may be that some workers may be waking up to a realization of just how much they may need to save. Asked how much they believe they will need to save to achieve a financially secure retirement, a striking number of workers cite large savings targets: 20 percent say they need to save between 20 and 29 percent of their income and nearly one-quarter (23 percent) indicate they need to save 30 percent or more.

• Aggressive as those savings targets appear to be, they may not be based on a careful analysis of their individual circumstances. Only 46 percent report they and/or their spouse have tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement. …