It's hardly surprising that prospects for a decent retirement took a big hit during the recession. But as the stock market hits new highs, the housing market recovers, and jobs slowly return, there has been no recovery in people's fears about being able to afford to retire.
The recovery has, perhaps ironically, underscored how far away most Americans are from a decent retirement even when economic times are better. And while a few bad years can derail retirement plans, it is becoming uncomfortably clear that even many years of increased attention to retirement savings might not be enough to make a big difference.
[Read: Do You Have a Retirement Gap?]
The 23rd annual retirement confidence survey, produced for the Employee Benefit Research Institute (EBRI) by Mathew Greenwald & Associates, found that retirement confidence has barely budged from the low water mark it hit in 2011. Only 13 percent were very confident of having a comfortable retirement, while 38 percent were somewhat confident, 21 percent not too confident, and 28 percent not at all confident.
The recovery has not altered the position of many employees that high debt levels and expensive living costs prevent them from making serious increases to their retirement savings plans. The survey found that "55 percent of workers and 39 percent of retirees report having a problem with their level of debt." More than 40 percent said high living expenses meant they simply could not afford to either contribute or contribute more to their retirement accounts.
[Read: The Financial Risks of Getting Older.]
"One reason that retirement confidence may have remained low despite a brightening economic outlook is that some workers may be waking up to a realization of just how much they may need to save each year from now until they retire so they can live comfortably in retirement," EBRI said. "Asked how much they believe they will need to save to achieve a financially secure retirement, a striking number of workers cite large savings targets: 20 percent say they need to save between 20 and 29 percent of their income and nearly one-quarter (23 percent) indicate they need to save 30 percent or more."
In reality, few workers save this much and the percentage of workers who are actually saving for retirement has been dropping—to 66 percent in the current survey from 75 percent in 2009. "A sizable percentage of workers have virtually no money in savings and investments," the survey said. And nearly 60 percent said the total value of their household savings and investments (excluding their homes) was less than $25,000.
Many earlier EBRI surveys reported that people responded to retirement pressures by saying they planned to keep their jobs and retire later. In practice, however, their plans did not change. A similar pattern emerged in the 2013 review. "The percentage of workers who expect to retire after age 65 has increased, from 11 percent in 1991, to 24 percent in 2003, 29 percent in 2008, and to 36 percent in the 2013" survey, the EBRI report said.
However, the actual retirement age has changed little despite altered expectations. "In 1991, only 8 percent of retirees said they retired after age 65," EBRI reported. "This percentage is 14 percent in 2013 ... In contrast, the median (midpoint) age at which retirees report they actually retired has remained at age 62 throughout this time."
Finally, the lack of retirement confidence also extended to Social Security and Medicare. Only 5 percent of those polled said they expected Social Security benefits to increase compared with current levels, while 41 percent were not confident this would happen. The comparable percentages regarding the maintenance of Medicare benefits were 6 percent favorable and 37 percent unfavorable.