2009 Retirement Confidence 2009 Retirement Confidence Survey: Survey: Summary of Key Findings Summary of Key Findings Employee Benefit Research Institute 1100 13 th Street NW, Suite 878 Washington, DC 20005 Phone: (202) 659-0670 Fax: (202) 775-6312 Mathew Greenwald & Associates, Inc. 4201 Connecticut Ave. NW, Suite 620 Washington, DC 20008 Phone: (202) 686-0300 Fax: (202) 686-2512 Presented to ASEC, April 15, 2009 Mathew Greenwald Mathew Greenwald & Associates
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2009 Retirement Confidence Survey: Summary of Key Findings Employee Benefit Research Institute 1100 13 th Street NW, Suite 878 Washington, DC 20005 Phone:
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Employee Benefit Research Institute1100 13th Street NW, Suite 878
Washington, DC 20005Phone: (202) 659-0670 Fax: (202) 775-6312
Mathew Greenwald & Associates, Inc.4201 Connecticut Ave. NW, Suite 620
Washington, DC 20008Phone: (202) 686-0300 Fax: (202) 686-2512
Presented to ASEC, April 15, 2009Mathew Greenwald
Mathew Greenwald & Associates
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Retirement Confidence Has Dropped to its Lowest Recorded Level
Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years? (2009 Workers n=1,001)
18% 25% 21% 24% 25% 24% 27%18% 13%
55% 47%45% 44% 40% 44% 43%
43%41%
19% 18%17% 18% 17% 17% 19%
21%22%
10% 16% 13% 17% 14% 10%16% 21%
6%
1993 2000 2003 2004 2005 2006 2007 2008 2009
Very Somewhat Not too Not at all Don't know/Refused
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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75%70%
58%63%
68%
45%49%
69%68%
58% 58%57%
Ages 25-34 Ages 35-44 Ages 45-54 Ages 55+
2007 2008 2009
The Decline in Retirement Confidence is Steeper Among Older Workers
Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years?
Percentage Very or Somewhat Confident
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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52%
87%80% 82% 85%
95%
86%80%
85%
73%
35%
93%
75%77%
63%
40%
60%
91%
<$25,000 $25,000-$99,999
$100,000-$149,999
$150,000-$249,999
$250,000-$499,999
$500,000 ormore
2007 2008 2009
Workers with $25K to $150K Exhibit the Largest Decline in Retirement Confidence
Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years?
Percentage Very or Somewhat Confident
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
5
85%
50%
59%
74%
49%
61%
Have done calculation Have not done calculation
2007 2008 2009
Those Who Have Done a Savings Calculation Lost More Retirement Confidence Than Those Who Did Not
Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years?
Percentage Very or Somewhat Confident
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Confidence in Preparing Financially Has Declined Only SlightlyHow confident are you that you (and your spouse) are doing a good job of preparing financially for your retirement? (2009 Workers n=1,001)
21% 26% 28% 24% 26% 26% 25% 26% 23% 20%
47%46% 49%
45% 47% 46% 50% 45% 48% 49%
18% 17% 13%15% 14% 12% 14% 15% 16% 16%
12% 10% 10% 14% 12% 16% 12% 13% 12% 14%
1993 1996 2000 2003 2004 2005 2006 2007 2008 2009
Very Somewhat Not Too Not At All Don't Know / Refused
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
7
Feelings of Financial Mastery and Belief in Equities as Long Term Investments Have Taken a HitPlease tell me how well each of the following statements describes you? (2009 Workers n=1,001)
38%
35%
32%
24%
0%
28%
22%
17%
34%
35%
39%
39%
40%
38%
31%
72%
70%
71%
63%
68%
61%
48%
Very well Well
1998
2000
2002
2009
1998
2000
2002
2009
I think anyone can have a comfortable retirement, if they just plan and save.
Over the long run, I believe stocks in general
will be a very good investment.
N/A
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Interest in Financial Planning Has Declined as the Need Has IncreasedPlease tell me how well each of the following statements describes you? (2009 Workers n=1,001)
0%
23%
19%
17%
3%
7%
4%
9%
39%
38%
31%
8%
8%
10%
12%
62%
57%
48%
12%
15%
13%
21%
Very well Well
I think preparing for retirement takes too much
time and effort.
I enjoy financial planning.
1998
2000
2002
2009
1998
2000
2002
2009
N/A
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Almost Three in Ten Think They Have Altered Their Target Retirement Date
32%
18%
Percent Yes
2003 2008 2009
28%
75%
25%
79%
18%
89%
9%
Later, at an older agethan before
Sooner, at a youngerage than before
2003 2008 2009
In the past 12 months, has the age at which you expect to retire changed? (2009 Workers n=1,001) If yes: Do you now expect to retire…? (2009 Workers who changed retirement age n=304)
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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The Poor Economy Heads the List of Reasons Why Workers Say They Are Postponing RetirementWhy has your expected retirement age changed? (Among workers changing their retirement age, n=304) (Top mentions, multiple responses accepted)
Poor economy 36%
Need to make up for losses in stock market 28%
Want to make sure have enough money 24%
Job loss, change in employment 10%
Cost of living higher than expected 9%
Uncertainty about stock market 7%
Need to pay bills/expenses/new purchases 6%
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Realistically, at what age do you expect to retire? (2009 Workers n=1,001)
22%
28%
31%
11%
1%
6%
30%
6%
10%
16%
21%
25%24%
11%
21%
24%
31%
23%
17%
9%
Before 60 60-64 65 66 or older Never retire
1994 2003 2008 2009
The Proportion of Workers Expecting to Retire After Age 65 is Growing More Slowly Recently Than Perceptions Indicate
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Did you retire earlier than you planned, later than you planned, or about when you planned? (2009 Retirees n=256)
Almost Half of Retirees Left the Workforce Before They Planned
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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46%
12%
14%
10%
14%
42%
35%
34%
23%
22%
18%
13%
1999
2009
Did you retire earlier than you planned because…? (2009 Retirees retiring earlier than planned n=121) (Percentage saying yes)
People Retire Early for a Variety of Reasons, Many Beyond Their Control
You could afford to retire earlier than planned
There were changes at your company, such as downsizing or closure
You had a health problem or disability
You wanted to do something else
You had to care for a spouse or another family member
You had another work-related reason
Changes in the skills required for your job
(2007: obsolete)
NA
NA
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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More Workers Plan to Work for Pay in Retirement than Retirees ReportDo you think you will do any work for pay after you retire? (2009 Workers n=1,001) Have you worked for pay since you retired? (2009 Retirees n=256) (Percentage saying yes)
56%
63%
70% 68% 66% 67% 66%63%
72%
34%
25%
37%
27%26%32%
28%22%22%
1998 2000 2003 2004 2005 2006 2007 2008 2009
Workers Retirees
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Fewer Retirees Say They Worked Because They Enjoyed ItIs the following a major reason, a minor reason, or not a reason why you worked for pay after you retired? (2009 Retirees who worked for pay n=100)
26%
25%
30%
28%
52%
74%
52%
62%
26%
25%
31%
27%
24%
17%
27%
31%
52%
50%
60%
55%
76%
91%
79%
93%
Major Reason Minor Reason
Wanting to stay active and involved
Enjoying working
Wanting money to make ends meet
Wanting money to buy extras
2008
2009
2008
2009
2008
2009
2008
2009
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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More Retirees Saw a Decrease in the Value of Their Savings/InvestmentsIs the following a major reason, a minor reason, or not a reason why you worked for pay after you retired? (2009 Retirees who worked for pay n=100)
14%
20%
9%
11%
27%
25%
35%
37%
10%
11%
21%
14%
16%
12%
17%
18%
24%
31%
31%
24%
43%
37%
52%
54%
Major Reason Minor Reason
A job opportunity
A decrease in the value of your savings or investments
Keeping health insurance or other benefits
Trying a different career
2008
2009
2008
2009
2008
2009
2008
2009
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Have you (or your spouse) tried to figure out how much money you will need to have saved by the time you retire so that you can live comfortably in retirement? (2009 Workers n=1,001)
48%53%
43% 42% 42% 42% 43%47%
44%
32%
45%51%
37%
1993 1999 2000 2003 2004 2005 2006 2007 2008 2009
Respondent Respondent and/or Spouse
Less Than Half of Workers Report Doing a Retirement Needs Calculation
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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How did you (or your spouse) determine this amount? Did you…? (Workers who gave amount needed for retirement n=871)
5%
7%
9%
18%
26%
44%Guess
Read or hear that is how much needed
Fill out a worksheet or form
Use an online calculator
Do your own estimate
Ask a financial advisor
The Plurality Guess at How Much They Will Need
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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How much did you (or your spouse) calculate you would need to accumulate IN TOTAL by the time you retire? If haven’t calculated: How much do you think you (and your spouse) will need to accumulate IN TOTAL by the time you retire so that you can live comfortably in retirement?
28%
19%23%
8% 8%11%
30%
14% 15%
8%
17%15%
Under $250,000 $250,000-$499,999
$500,000-$999,999
$1,000,000-$1,499,999
$1,500,000 ormore
Don'tknow/Don'tremember
All Workers (n=1,001) $75,000 or more (n=391)
Many Think They Need Little in Savings to Live Comfortably in Retirement
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Implications
• Reduction in confidence provides a better, but also more difficult, context for education– Key question: How to use this opportunity
• The decision of when to retire is critical
– For many, staying in the workforce longer is a key to retirement security
– The decision about when to claim Social Security has risen in importance
Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,2009 Retirement Confidence Survey
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Implications (continued)
• Need to focus attention on helping people understand how “much” sustainable lifestyle they can get from their current asset levels plus savings at current levels
– This may lead to more effective retirement and perhaps savings decisions
• Need to focus attention on helping people understand the importance of having “sufficient” assets at the older ages and the penalty of running out of assets