Monday, March 21, 2011

Reality Check

We all like to think that we'll keep living - and working - forever. But the reality is that at some point most of us will need, or want, to retire.

I hope to keep writing - for fun or profit - as long as my faculties and my fingers are in working order. But someday it's likely that I'll give up my formal contracts in favor of full or at least partial retirement.

Because I've been self-employed for more than two decades now, I've had to set up and fund my own retirement nest egg. More and more Americans are in the same boat, with little or no employer-sponsored pension money to count on.

But a new survey finds that a record number of them have lost confidence in their ability to retire comfortably. The 2011 Retirement Confidence Survey done by the nonpartisan Employee Benefit Research Institute finds that 27% of workers - the most ever in the two decades of the survey — now say they are “not at all confident” about having enough money to live comfortably in retirement.

The percentage of workers saying they are “very confident” is at 13%, the lowest rate ever measured by the survey.

Part of this sad state of affairs is, of course, our recent recession and its dampening effect on stock portfolios; high unemployment rates; government fiscal crises; rising health costs and on and on. But the EBRI has also warned for years that Americans are not saving enough:

Well over a third say they determined their retirement savings need by guessing. Seventy percent say they are a little or a lot behind schedule in planning and saving for retirement.

More than half of workers say they have less than $25,000 in total savings and investments, excluding their homes.

A significant number of workers (20 percent) say they now intend to retire later (at an older age) than they had planned. But almost half of current retirees (45 percent) say they retired earlier than they planned, mainly because of a health problem or disability.

We all got discouraged about retirement when our nest eggs evaporated in the recession. But the good news is that stocks are back, at least for the time being. If you're not up-to-date on your savings or haven't revisited your retirement plans lately, this is a good time to do so.


  1. Karen, I'm amazed that so many Baby Boomers have not prepared for retirement and they really have no idea how much they have saved and where it is invested. Our generation is going to be in a pickle in about 10 years! Thanks for this article.

  2. Nancy, I've been reading these stats since the early 2000s when I wrote a retirement planning column for Long Island Newsday. They just don't seem to improve.

    Not a good reflection on the selfish stereotype of the Baby Boomers, of which I am at the tail end - an "Echo Boomer" I think it's called.