National Survey Results Indicate Low Retirement Confidence
COLUMBIA - A 2013 retirement confidence survey found the amount of people who feel confident in having enough money for retirement is nearly the same as the record lows from 2011.
The Employee Benefit Research Institute released the survey Tuesday that polled Americans about their retirement outlook. Survey researchers found that 13 percent of workers were very confident, 38 percent were somewhat confident, 21 percent were not too confident and 28 percent were not at all confident.
Michael Guillemette, an assistant professor at MU's Department of Financial Planning, said these statistics are a result of the economic recession. He said while Missouri may be in a better financial position than some other states, these numbers hold true to Missouri as well.
"We are in a fortunate position relative to the rest of the U.S. Our unemployment rate in the state is about 6 percent, where as the national rate is 6.6 percent. We also have a lower debt per person compared to the other states," Guillemette said. "I don't mean to paint a rosy picture because the picture is not good for the average American or for the average Missourian in terms of retirement savings outcomes."
According to survey results, the problem could be a lack of preparation. The survey cites "only 46 percent [of workers] or their spouses 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."
Rui Yao is an associate professor at MU's Department of Financial Planning who conducted her own research about retirement. She said that statistic was shocking.
"I don't care if you're 25, if you're 60, if you need to save, act today. Over half the people have not even tried to calculate how much they should accumulate before they retire and that is concerning," Yao said.
Researchers also found a relationship between retirement savings and household income from 2009 to 2013. Workers with a household income of $75,000 and more were the only group of workers who reported having steady savings for retirement. The amount of workers who reported saving for retirement with a household income of $35,000 and less dropped 25 percent. Those in the middle-income group dropped only 4 percent.
Guillemette said it's understandable. He said since the recession people have different priorities.
"People are more concerned initially with thinking about, 'Am I going to have a job? Am I going to have enough food to support my family?' Once those issues are resolved, then people can start thinking about, 'OK, I need to start saving for longer-term goals such as retirement planning,'" Guillemette said.
To see the Employee Benefit Research Institutes full results click here.