A majority (83 per cent) of U.S. workers say they’re concerned the increasing cost of living will make it harder to save for retirement and more than three-quarters (78 per cent) are concerned inflation will stay high, according to a new survey by the Employee Benefit Research Institute and Greenwald Research.
The survey, which polled more than 1,200 employees and over 1,200 retirees in the U.S., found while 68 per cent of employees and 74 per cent of retirees said they’re confident they’ll have enough money to live comfortably throughout retirement, just 21 per cent of current workers expressed strong confidence.
One aspect contributing to workers’ and retirees’ retirement confidence is their income, as 28 per cent of workers and 32 per cent of retirees who are confident said this was due to stable assets and steady income. Among respondents who said they don’t feel confident about their retirement prospects, 31 per cent of workers and 40 per cent of retirees cited inflation while others pointed to their lack of savings (39 per cent and 27 per cent, respectively).
While social security (88 per cent) remains the No. 1 source of retirement income for respondents who are still working, a similar percentage (84 per cent) cited a workplace retirement savings plan and 77 per cent cited their personal retirement savings or investments. Meanwhile, nearly all (91 per cent) retirees said social security is their top source of retirement income, followed by their personal retirement savings or investments (68 per cent) and a workplace retirement savings plan (48 per cent).
Although nearly half (49 per cent) of working respondents estimated they’ll need $1.5 million or more to retire, a third currently have less than $50,000 in savings and investments and 14 per cent have less than $1,000 in savings and investments.
Two-thirds of workers and almost three-quarters of retirees believe they have enough savings
to handle an emergency expense; however, some are already using their retirement plans to pay for emergencies. Nearly one in five have taken a loan or withdrawal from their retirement plan for unforeseen circumstances, such as to make ends meet (30 per cent), pay for a home or car repair (17 per cent) and to cover a medical expense (15 per cent).
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