Workers Gaining Back Some Retirement Confidence

Older workers’ confidence in their ability to retire comfortably has rebounded modestly in the past year, although confidence levels remain well below those prior to the financial crisis.

The Towers Watson survey found that the percentage of older workers (ages 50 to 64) who are very confident about having enough resources to live comfortably five years into retirement rebounded from 44% in March 2009 to 50% this year. In 2007, 63% of older workers were very confident.   

While only 9% of all workers believe their assets will last through 25 years of retirement, that is still a slight improvement since last year, Towers Watson said in a press release.   

Employees with defined benefits (DB) plans have considerably more confidence in their retirement resources than those with only a defined contribution (DC) plan. More than half (52%) of workers with DB plans are somewhat or very confident of having enough resources to live comfortably 25 years into retirement, compared to only one-third (34%) of older workers with DC plans.   

According to the press release, while concerns among older workers with DB plans have eased, younger workers are growing increasingly worried over their DB benefits. The percentage of older workers who are concerned that their employer will reduce the benefits they earn in the future declined from 44% in 2009 to 39% this year, while the percentage concerned their employer will eliminate benefits they earn in the future dropped from 38% to 30%.   

Among younger workers (under age 40), however, more than two-thirds (68%) are concerned their employer will reduce future benefits, an increase from 61% in 2009, while the percentage concerned their employer will eliminate benefits increased sharply, from 42% in 2009 to 59% this year.  

Other survey findings include: 

  • More than half (55%) of all respondents said they had seen significant declines in their retirement savings over the last two years, a slight improvement from 60% in March 2009. 
  • The percentage of employees who are content with their financial situation today has increased slightly -from 26% in March 2009 to 33% this year.