Findings of the 2008 RCS (Published in April)
The percentage of workers very confident about having enough money for a comfortable retirement decreased sharply, from 27 percent in 2007 to 18 percent in 2008, the biggest one-year drop in the 18-year history of the survey. Retiree confidence in having a financially secure retirement also decreased, from 41 percent to 29 percent, a drop of 12 percentage points.
RCS results indicate health costs in particular have become a big concern for retirees: Almost half of retirees (44 percent) say they have spent more than expected on health care expenses. More than half of retirees (54 percent) say they are now more concerned about their financial future than they were right after they retired, a 14 percentagepoint increase from a year ago (40 percent in 2007).
The survey picked up several other signs of public unease about retirement:
• Overall concerns about basic expenses: Confidence in specific financial aspects related to retirement decreased. In particular, the percentage very confident in having enough money to take care of basic expenses decreased from 40 percent in 2007 to 34 percent in 2008 for workers and from 48 percent to 34 percent for retirees.
• Retirees’ loss of confidence is reflected in several attitudes they hold about their retirement finances. Retirees are less likely than in 2007 to believe they can always cut back on their lifestyle if it looks like they might use up all of their savings (61 percent, down from 70 percent). At the same time, 39 percent of retirees now think they are likely to live long enough to use up all of their savings (up 10 percentage points from 29 percent
in 2007).
• Retiree health coverage: Barely one-third of all workers now expect to have access to employment-based health insurance in retirement, down 8 percentage points (from 42 percent in 2007 to 34 percent in 2008). Although 41 percent of retirees say they currently have access to health insurance through a former employer, many employers are eliminating health care coverage for future retirees.
• Confidence by age and income: The percentage saying they are very confident about having enough money for a comfortable retirement decreased from 31 percent in 2007 to 18 percent in 2008 among workers ages 25–34, and from 28 percent to 16 percent among workers ages 35–44. Similarly, it decreased from 14 percent to 5 percent among workers with household income under $35,000 and from 25 percent to 13 percent among those with
income of $35,000–$74,999.
The survey also provides some evidence that concerns about the present may be limiting Americans’ ability to think about or plan for their future situation in retirement. When asked what they think is the most pressing financial issue facing most Americans today, just 5 percent of workers and 4 percent of retirees cited saving or planning for retirement. Instead, most mention:
• Making ends meet or the cost of living (17 percent of workers, 19 percent of retirees).
• Paying for health insurance or medical expenses (16 percent of workers, 25 percent of retirees).
• Making mortgage payments or paying for housing (16 percent of workers, 10 percent of retirees).
• Paying down debt or loans (13 percent of workers, 5 percent of retirees).
• Fuel or energy costs (9 percent of workers and retirees).
• Job uncertainty (6 percent of workers, 8 percent of retirees).
The 2008 Retirement Confidence Survey® was conducted in January 2008 through 20-minute random telephone interviews with 1,322 individuals (1,057 workers and 265 retirees) age 25 and older in the United States. The RCS is the country’s longest-running and most comprehensive study of the attitudes and behavior of American workers and retirees toward all aspects of saving, retirement planning, and long-term financial security.
The RCS is conducted by the Employee Benefit Research Institute (EBRI) a private, nonprofit research institute based in Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby and does not take policy positions. www.ebri.org
