According to a press release on the study results, only 59% of the full-time workers surveyed claim to be confident in a comfortable retirement, down from 75% a year ago. Sixty percent say they believe they could work until age 65 and still not have enough saved for retirement, up from 48%.
Less than half (48%) of the survey respondents agree they are building a large enough retirement nest egg, down from nearly two-thirds (65%) who said the same in the previous survey.
Growing debt seems to be a factor in the declining confidence. The number of workers citing “paying off debt” as their greatest financial priority has increased to 32%, up from 18%, the release said. Workers whose top priority is “just getting by – covering basic living expenses’ has remained relatively the same at 17%, compared to 16% last year.
When posed with the question of what one factor was preventing them from saving more for retirement, “already stretched – need to cover basic living expenses,’ remained the most frequent response; however, the number who cited “too much debt – need to pay it off’ jumped to 25% from 16% last year. Seventy percent of this year’s respondents cited “excessive credit card debt’ – a significant jump from 48% last year.
Workers not only seem to be putting away less for their retirements, but the survey also found a noticeable jump in employees taking out a loan from their retirement plans. Nearly one in five (18%) said they took out a loan in 2007, up from only 11% in 2006. Nearly half (49%) of those who took out a loan said it was for paying off debt, compared to 27% in 2006.
On a positive note, Transamerica found that 401(k) plan participation rates are high, contribution rates are holding steady, and very few respondents have decreased or stopped their contributions. Additionally, 27% of this year’s respondents indicated that saving for retirement is their top priority (up from 23% last year).
This 9th Annual Transamerica Retirement Survey was conducted online within the United States by Harris Interactive on behalf of Transamerica Center for Retirement Studies between October 11 and November 21, 2007, among 2,011 full-time workers using the Harris online panel.