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Concern About Retirement, But Some Confidence Regardless

Practice Management

Concern about retirement and paying for it cuts across sharp societal divisions and has been heightened by the pandemic; nonetheless, confidence regarding some saving vehicles persists, says a recent report. 

In the National Institute on Retirement Security (NIRS) study “Retirement Insecurity 2021: Americans’ Views of Retirement,” Tyler Bond, Dan Doonan and Kelly Kenneally highlight the concerns many Americans have regarding retirement, but also write that some tried-and-true supports for retirees enjoy continued support and confidence. Bond, Doonan and Kenneally are the NIRS’ research manager, executive director and communications counsel, respectively.

Bond, Doonan and Kenneally write that the key findings of the NIRS study include the following. 

Recent Developments. More than half of respondents reported heightened concerns about a financially secure retirement due to the pandemic. And 67% of those who have changed when they retired or have considered doing so cited the pandemic as the reason. 

Widespread Overall Concern About Economic Security in Retirement. More than two-thirds—67%—contend that there is a retirement crisis in the United States. That bridges political divisions: 62% of Republicans believe that, and even more Democrats and independents do, to the tune of 70% of each. Bond, Doonan and Kenneally add that there also was unity regarding policymakers’ understanding of individuals’ retirement savings struggles.

Respondents also make it personal:

  • 56% expressed concern about their ability to be financially secure in retirement;
  • 65% of current workers expect that they will have to work past retirement age in order to finance retirement; and 
  • 68% believe that the average worker cannot save enough on their own to ensure financial security in retirement. 

Strong Support for Social Security. The NIRS study found strong support for the program, and some support for expanding it. It also found that: 

  • nearly 80% contend that Social Security should remain a priority regardless of budget deficits;
  • 60% support increasing the amount workers and employers contribute to Social Security; and
  • 50% support expanding Social Security. 

Strong Endorsement of Pensions. The NIRS found strong belief in defined benefit plans:

  • 65% consider pensions superior to 401(k)s;
  • 75% belief that all workers should have access to a pension plan; and 
  • 76% view of DB plans favorably.

The effect of the pandemic on the economy and employment—coming while recovery from the Great Recession was still taking place for many— had not only short-term effects but also “may create substantial uncertainty about financing retirement,” Bond, Doonan and Kenneally write. Not only that, it could result in Americans working longer or reconsidering their retirement plans. And, they argue, changes in the retirement system exacerbate the situation. 

“Today, most Americans are not on track for a secure retirement,” they write. But while they report that most respondents evince that view, they balance it with the finding that long-standing sources of retirement funding still enjoy confidence and are considered “important for rebuilding retirement readiness.”