Summer 2015 Investment Notes

Sponsored by the Employee Benefit Research Institute (EBRI), the American Savings Education Council (ASEC), and Mathew Greenwald & Associates (Greenwald), the annual Retirement Confidence Survey is a random, nationally representative survey of 1,000 individuals age 25 and over. Below we present a few interesting findings from the April, 2015 survey:

• Despite approaching retirement age, almost half of workers age 45 and older have not yet tried to calculate how much money they will need to have saved so that they can live comfortably in retirement. Younger workers ages 25–34 are less likely than older workers to indicate they have tried to calculate how much money they need to accumulate for retirement.
• Workers who have done a retirement savings needs calculation tend to report higher savings goals than do workers who have not done the calculation. Despite higher savings goals, workers who have done a retirement savings needs calculation are more likely to feel very confident about affording a comfortable retirement (33 percent vs. 12 percent who have not done a calculation).
• A sizable percentage of workers say they have virtually no money in savings and investments. Fifty seven percent report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000. This includes 28 percent who say they have less than $1,000 in savings.
• Many workers acknowledge they can save more than they are currently saving. Seven in 10 (69 percent, up from 62 percent in 2011) say it is possible for them to save $25 a week more than they are currently saving. This includes 55 percent of workers who have not saved any money for retirement. 
• Amount of debt and feeling confident about having a financially secure retirement are inversely related. The RCS has consistently found a relationship between the level of debt and retirement confidence.  Only 6 percent of workers who describe their debt as a major problem say they are very confident about having enough money to live comfortably throughout retirement, compared with 35 percent of workers who indicate debt is not a problem. On the other hand, 56 percent of workers with a major debt problem are not at all confident about having enough money for a financially secure retirement, compared with 14 percent of workers without a debt problem. 
• How long do you expect to live? Most workers expect to live to at least age 85; 40% are somewhat likely and 35% very likely. However, the likelihood to live to age 95; 30% feel it is not too likely and 32% feel that it is not at all likely. 
• The majority (67%) of workers expect to work for pay in retirement. Reasons given for doing so include; they enjoyed working (83%), wanting to stay active (79%). But also for financial reasons, wanting money to buy extras (54%), keeping health insurance or other benefits (34%).

The entire survey and other valuable health and retirement information can be found at the Employee Benefit Research Institute website – (www.ebri.org)