Retirement Saving Confidence Up as Year Ends

More Americans are more confident about saving for retirement as 2018 draws to a close than they were as the year began, according to a recent study. And more good news — that sentiment has grown the most among younger workers.

Glass Less Empty

The Pew Charitable Trust recently reported that in a 2016 study it conducted, it found that many employees were uncertain what their retirement would be like. Pew also found sizable numbers of people who expected to continue working past age 65. Nearly two-thirds of workers studied in 2016 told Pew that they expect to do so, and most of them considered it financially necessary. Pew added that many also said that they would work as long as possible and were uncertain when — or even if — they would retire.

But times, and attitudes, can change. In research recently conducted by Country Financial, just over half of respondents — 56% — consider their financial stability to be good or excellent, and that includes retirement readiness. That’s an eight percentage point jump since the start of 2018 in the statistics they keep. And while just under half of Millennials feel that way, such confidence is now held by 49% as opposed to 37% 12 months ago.

The LIMRA Secure Retirement Institute notes that it has found that 50% of Americans expect to live the lifestyle they would like to when they retire. Country Financial’s findings are even better; they report that 60% of Americans consider themselves at least somewhat likely to be able to afford to live comfortably during retirement.

What makes the difference between confidence and pessimism regarding financial prospects during retirement, LIMRA says, is having a formal plan. Half of those about to retire and those who already have and who have a formal retirement plan feel such confidence, they found; a majority of pre-retirees overall, a cohort that includes those without a plan, do not, LIMRA found.

Next Steps

Pew argues that “policymakers should consider how to increase access to retirement savings plans,” and they also should act to increase participation and savings rates when workers lack access to a plan.

Similarly, LIMRA suggests creation of formal retirement plans would improve the situation, as would employees participating in employer-provided plans and contributing at least what the employer does to their accounts. Country Financial says that Millennials are already heeding such advice, and that now 55% of them are setting money aside for the future, eight percentage points better than one year ago.