2012 Retirement Confidence Survey: Job Insecurity, Debt Keep Retirement Confidence at Historic Lows
Outlook brighter for those who plan and save says The Principal
March 13, 2012 (Washington) – A new survey says Americans’ confidence in their ability to afford a comfortable retirement remains at historically low levels in the face of job uncertainty and financial insecurity.
The 2012 annual Retirement Confidence Survey, released today by the nonpartisan Employee Benefit Research Institute (EBRI) in Washington, and co-sponsored by the Principal Financial Group®, finds only 14 percent of Americans are very confident they will have enough money to live comfortably in retirement . Workers with the most debt have the least confidence.
Presented by Greg Burrows, senior vice president for
The Principal Financial Group
Current worries appear to overshadow long term planning. Forty-two percent of workers identify job uncertainty as the most pressing financial issue facing most Americans today. The percentage of those saving for retirement continues to decline, many report virtually no savings and investments and most workers have not even tried to calculate how much they need to save.
But the survey data show that retirement confidence levels are measurably higher (20 – 30 percent) among workers who’ve taken positive financial actions, including saving in an employer-sponsored plan, getting advice from a financial professional and calculating retirement savings needs.
“Especially in an uncertain economy, having a plan and taking action helps Americans focus on what they can control and builds a realistic sense of optimism about the future,” said Greg Burrows, senior vice president of the Principal Financial Group, long-time underwriter of the Retirement Confidence Survey. “Working with a financial professional to set goals, and putting aside as much as possible, helps with short-term needs and paves the way for more security in the long term.”
This is the 22nd annual Retirement Confidence Survey, making it the longest-running annual survey of its kind in the nation. Among other key findings available on the EBRI website at www.ebri.org:
Little savings: Many workers report they have virtually no savings and investments. In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.
Fewer saving: Two-thirds (66 percent) of workers report they and/or spouses have saved for retirement, a continuing decline from the 75 percent measured in 2009. Fifty-eight percent report currently savings versus 65 percent in 2009.
Workers’ expected retirement age: In 1991, 11 percent of workers said they expected to retire after age 65, and by 2012 that has grown to 37 percent.
Retirees’ experience: Regardless of retirement age expectations, half of current retirees surveyed say they left the work force unexpectedly due to health problems, disability, or changes at their employer, such as downsizing or closure.
The annual Retirement Confidence Survey is conducted by the nonpartisan Employee Benefit Research Institute (EBRI) and Mathew Greenwald and Associates. The Principal Financial Group is among the more than two dozen organizations that provided funding for the survey. Full results are on the EBRI Website at www.ebri.org
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About the Principal Financial Group
The Principal Financial Group® (The Principal®) is a global investment management leader including retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $335.0 billion in assets under management and serves some 18.0 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG.
- Statistically equivalent to the low of 13 percent measured in 2011 and 2009.
- “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
- As of December 31, 2011.