Workers Could Do More to Plan for Retirement

Sixty percent of employees expressed at least some confidence in retirement, but their planning efforts and savings balances do not support this confidence level.

Six in 10 American workers feel confident in their ability to live comfortably in retirement, though few (18%) feel very confident, according to the Employee Benefit Research Institute’s 2017 Retirement Confidence Survey (RCS).

These numbers are lower than last year, noted Stephen Blakely, editor and communications director for EBRI, in a media call. “Overall confidence is stable, but fewer are feeling really confident,” he said.

However, just 18% of workers feel very confident that they are doing a good job preparing for retirement, and only 38% feel somewhat confident. Thirty-one percent report that they feel mentally or emotionally stressed about preparing for retirement.

Six in 10 workers (61%) in the 2017 RCS report that they or their spouse have saved money for retirement. Nearly as many (56%) report that they are currently saving for retirement. Workers who have any retirement plan are dramatically more likely than those who do not have such a plan to report they or their spouse have personally saved for retirement (80% vs. 11%), and to say they or their spouse are currently saving for retirement (74% vs. 7% among those without a plan).

One of the primary vehicles that workers use to save for retirement is an employer-sponsored retirement savings plan. Seventy-three percent of employed workers report they are offered such a plan by their current employer, and more than eight in 10 (83%) of eligible employees say they contribute money to their employer’s plan. 

The RCS has consistently found that retirement confidence continues to be strongly related to retirement plan participation, whether in a defined contribution (DC) plan, defined benefit (DB) plan, or individual retirement account (IRA). Workers reporting they or their spouse have money in a DC plan or IRA or have benefits in a DB plan from a current or previous employer are more than twice as likely as those without any of these plans to be at least somewhat confident (71% with a plan vs. 33% without a plan).

However, a sizable percentage of workers say they have no or very little money in savings and investments. Among RCS workers providing this type of information, 47% report that the total value of their household’s savings and investments, excluding the value of their primary home and any DB plans, is less than $25,000. This includes 24% who say they have less than $1,000 in savings.

Workers who have a retirement plan have significantly more in savings and investments than do those without a plan. Two-thirds of workers without a retirement plan (67%) report having less than $1,000 in savings and investments, compared with just 9% among workers with a retirement plan.

NEXT: How are workers preparing for retirement?

“Small shares of workers are taking steps to actively plan for retirement,” Lisa Greenwald of Greenwald & Associates noted in the media briefing.

Just four in 10 workers (41%) report they and/or their spouse have ever tried to calculate how much money they will need to have saved so that they can live comfortably in retirement. Workers reporting that they or their spouse participate in a retirement plan are significantly more likely than those who do not participate in such a plan to have tried a calculation (49% vs. 15%). “This is a key step in preparing for retirement,” Greenwald said in the media briefing.

Among those who attempted a calculation, 64% estimate that they need $500,000 or more, including 37% who believe they need $1,000,000 or more. Workers who have done a retirement savings needs calculation tend to report higher savings goals than do workers who have not done the calculation. Nearly half of workers who have done a calculation (49%), compared with 29% of those who have not, estimate they need to accumulate at least $1 million for retirement.

At the other extreme, 12% of those who have done a calculation, compared with 26% who have not, think they need to save less than $250,000 for retirement. Despite higher savings goals, workers who have done a retirement savings needs calculation are more likely to feel very confident about affording a comfortable retirement (77% at least somewhat confident vs. 52% at least somewhat confident who did not do a calculation).

Some workers, but not majorities, report they have taken other steps to prepare for retirement. These include thinking about how they would occupy their time in retirement (44%), estimating how much income they would need each month in retirement (38%), and estimating the amount of their Social Security benefit at their planned retirement age (38%). Nearly four in 10 workers (38%) have considered moving or down-sizing. 

Fewer say they have talked with a professional financial adviser about retirement planning (23%), calculated how much they would likely need for retirement health expenses (21%), or prepared a formal, written financial plan for retirement (11%).

Workers who have spoken to a financial adviser about retirement planning express greater overall confidence in their ability to afford a comfortable retirement (81% at least somewhat confident vs. 54% at least somewhat confident among those who have not spoken to an adviser).

The survey was conducted from January 6, 2017, to January 13, 2017, through online interviews with 1,671 individuals (1,082 workers and 589 retirees) ages 25 and older in the United States. RCS results and fact sheets may be found at