3 Min Read
NEW YORK (Reuters) - The recession has driven confidence among U.S. workers in the prospect of a comfortable retirement to record lows, research showed on Tuesday.
Only 13 percent of workers feel very confident they will have enough money for a comfortable retirement, the lowest level since the Employee Benefit Research Institute, a public policy research organization, began its annual study in 1993.
Respondents blamed economic uncertainty, a drop in the value of their retirement savings, and increases in healthcare and day-to-day expenses for their lowered expectations, it said.
Only a quarter of workers expect to have enough money to cover basic expenses in retirement, it said. Just 13 percent are very confident they can pay for medical expenses.
Yet while workers are worrying, many remain poor planners, the study showed.
Fewer than half, 44 percent, have tried to calculate how much they will need to have saved by the time they retire. The same number simply guess what they will need to be comfortable in retirement, it said.
Those who knew the most about their own financial realities were most likely to lose confidence in their futures.
Among workers who have calculated their retirement needs, the proportion calling themselves very confident dropped to 19 percent in 2009 from 29 percent the previous year.
Confidence remained level among those who have done no calculation, at 8 percent in 2009 and 9 percent in 2008.
Among those feeling less confident, 81 percent said they have cut expenses, 43 percent have changed the way they invest their money and 38 percent are working more hours or a second job, it said.
"In some ways the loss of confidence is a positive because confidence was leading people to not take the steps now that they have to take," said Mathew Greenwald, president of Mathew Greenwald & Associates, a Washington-based market research firm that co-sponsored the Retirement Confidence Survey.
"That's the silver lining in a very dark cloud," he said. "People are taking a more realistic read of what they need to do, which I think is a positive."
Among those who are already retired, those feeling very confident about their financial security also dropped to a new low of 20 percent.
The random survey was conducted in January by telephone interviews with 1,001 workers and 256 retirees. The margin of error was estimated at plus or minus 3 percentage points.
Editing by Claudia Parsons and Eric Walsh