As the economy tanks, so does Americans' confidence about their ability to afford retirement. Workers saying they feel very confident about having enough money for a comfortable retirement decreased from 27 percent in 2007 to 18 percent this year, according to an Employee Benefit Research Institute survey released today. That's the biggest one-year drop in the 18-year history of the survey.
Current retirees are also feeling the pinch. Retirees' confidence in their financial security decreased to 29 percent from 41 percent last year. "The economy and health costs are major concerns," explains Dallas Salisbury, president of the nonpartisan EBRI, in a statement.
Employees who aren't optimistic about their retirement prospects, especially those without a defined-benefit pension plan, intend to ride out the financial downturn by working longer. In the past year, some 18 percent of all workers have changed the age at which they expect to retire. But continued employment can happen only, of course, if they can find work.
More than half of all retirees leave the workforce earlier than planned—and not because of a financial windfall or exotic vacation plans. Many people who retired early cite negative reasons for leaving their jobs, such as health problems or disability (54 percent), changes like downsizing or closure at their company (33 percent), and the need to care for a spouse or family member (25 percent). Some retirees reported a mix of both positive and negative reasons for early retirement, but just 7 percent listed only positive reasons.