Most workers still expect a good retirement

Those either `very' or `somewhat' confident decline from 70% to 66%

April 11, 2003|By Eileen Ambrose | Eileen Ambrose,SUN STAFF

Though more baby boomers plan to work longer and a growing number of workers say they won't have enough money for retirement, the majority of employees remain optimistic that they will retire comfortably, according to a survey released today.

The 13th annual Retirement Confidence Survey found that 66 percent of workers polled early this year were either "very" or "somewhat" confident of living a comfortable retirement, down from 70 percent the year before. The weak economy and three years of stock market losses may have cracked some workers' confidence or forced them to take a reality check.

Sixteen percent of workers polled said they are not at all confident they will have enough money saved for retirement, up from 10 percent last year. Almost one-fourth of workers ages 45 and older decided in the past year to postpone their retirement, a 9 percentage point jump, so they could have more time to save.

The telephone survey of 1,000 adults was conducted in January for the Employee Benefit Research Institute and its affiliate, the American Savings Education Council. The survey has a margin of error of plus or minus 3 percentage points.

"I'm hoping that those who are saying they may have to work longer is a sign that people are being more realistic about their future," said Don Blandin, president of the American Savings Education Council in Washington.

The survey gave several possible reasons why workers are still confident about their retirement, although many financial experts are worried on their behalf.

One reason may be that workers have no idea how much money they would need to retire in comfort.

Sixty-one percent of workers haven't done the calculation, and many workers underestimate how much they will need, the study found. "They are still saving blindly," Blandin said.

In fact, workers spend more time during the year planning for the holidays or a vacation than they do planning their retirement, the study found.

Among those who have calculated their retirement needs, 40 percent said they made changes such as saving more money and adjusting their money allocation.

Another reason why retirement confidence hasn't decreased much is that many workers weren't affected by the bear market because they had little or no money in stocks, the survey found.

"That demonstrates that we have too many Americans who don't have access to a formal retirement plan at their place of employment," Blandin said.

It also means that many workers are reluctant to invest on their own, perhaps overwhelmed at the prospect of learning about stocks and bonds, Blandin said.

Seventy percent of workers say they plan to have a paying job in retirement. But that might not be a solution for those who haven't saved enough, Blandin said.

Only 28 percent of retirees work for pay, and 40 percent retired earlier than expected because of circumstances out of their control, such as a health problem or a company closing.

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