Retirement Fantasy

The release of the Employee Benefit Research Institute‘s 2010 Retirement Confidence Survey is something that really interests a person like me. For years I’ve been digging into personal finance and economics texts in the ravenous pursuit of knowledge in the fields. However, occasionally a report like the RCS comes along and allows me to really benchmark my own behavior against that of my peers – other Americans. What does the report show? In my opinion, many people aren’t taking the whole investing for retirement thing seriously.

The Confidence Gap

Despite the fact that many Americans aren’t saving a lot for retirement, respondent confidence levels are little changed from 2009. The gap between workers who believe they are ‘very’ or ‘somewhat’ confident they will have enough money to live comfortably through their retirement years and those who state that they are ‘not too’ or ‘not at all’ confident is a mere 8% (54% vs. 46%). The recession has certainly scared a number of people into a reality check – these numbers are the lowest of the last 10 years- even lower than 2001 (63% vs. 35%). In fact, here’s a glance at the trend over the last ten years:

Worker Confidence in Having Enough Money to Live Comfortably in Retirement, 2000 – 2010 (EBRI)

You can see that worker confidence in having enough money to retire comfortably has plunged since 2007 from the above graph – and it’s an ugly plunge.

What Have They Got?

Lucky for you and me, the EBRI also reports on the amount people have saved (less their primary residence – usually the largest savings vehicle in retirement – and any defined benefit retirement plans). They include figures from 2002 and 2005 – 2010. I’ll simplify the graph to those with less than $25,000 in savings/retirement accounts, as well as $25,000 to $99,999 and $100,000 or more. I’ve added a statistic – the percentage gap between those with less than $25,000 and those with more than $100,000 in savings and investments so you can see the trend in those categories.