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CCH® PENSION — 04/04/12

Retirement confidence remains at historically low levels, EBRI survey reports

Americans' confidence in their ability to afford a comfortable retirement remains at historically low levels, according to the 22nd annual Retirement Confidence Survey, conducted by the Employee Benefit Research Institute (EBRI) and Matthew Greenwald & Associates, Inc. Job insecurity was identified by survey respondents as the most pressing financial issue.

Retirement confidence "has plateaued at the lowest levels we've seen in two decades of conducting this survey," said Jack VanDerhei, EBRI research director and co-author of the report.

Stagnant confidence levels

The survey found that just 14% of employees are very confident that they will have enough money to live comfortably in retirement. This figure is statistically equivalent to the survey low of 13% measured in 2011 and 2009.

Insufficient savings

Many workers report they have virtually no savings or investments and their expected age of retirement continues to rise, the survey found. Overall, 60% of employees 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.

A quarter of the surveyed workers say that the age at which they expect to retire has changed in the past year. In 1991, 11% of employees said that they expected to retire after age 65. By 2012, that figure has grown to 37%.

Employees who currently contribute to an employer-sponsored retirement plan were more than twice as likely as those who do not to report savings and investments of at least $50,000. Such employees are also more confident about their retirement prospects. Nearly two-thirds (64%) of those who are currently contributing money to an employer-sponsored retirement plan are either very or somewhat confident that they will have sufficient funds to live comfortably throughout their retirement years, as opposed to only 48% of those who do not.

Use of online technology

According to the survey, only a minority of employees and retirees feel very comfortable using online technologies to perform various tasks related to financial management. Relatively few use mobile devices, such as a smart phone or tablet computer, to manage their finances and just 10% of those who use online technology say they are very comfortable obtaining advice from financial professional online.

Source: EBRI press release, PR #962, March 13, 2012.

For more information, visit http://www.wolterskluwerlb.com/rbcs.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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