Americans' Retirement Hopes Are Filled With Holes

The 2006 EBRI Retirement Confidence Survey results are out, and Americans' retirement hopes are like Swiss cheese, the survey concludes--full of holes. A large majority of Americans expect that they will enjoy their retirement years, but too many have not actually taken any steps to make their hopes a reality. Thus, their confidence levels are just not realistic.

The survey was released yesterday and shows that many Americans have accumulated only modest retirement savings and underestimate how much they will need for retirement.

Regardless, 24% of those polled feel very confident that they will have enough money for retirement and 44% are somewhat confident.

Many workers claim that they are counting on employer-provided benefits, as 61% expect to receive an income from such plans. Only 40% of workers indicate that their spouse presently has a defined benefit plan.

"Recent research has found that when a 'traditional' pension is frozen, many workers in the pension are unlikely to get an equal benefit value contributed to their 401(k) plan," said Jack VanDerhei, a Temple University professor, EBRI fellow and co-author of the Retirement Confidence Survey. "Each case is different, but it's clear that people currently working should factor into their retirement planning the long-term trend away from 'traditional' defined benefit pensions and toward 401(k)-type plans."

He added: "We find there are a lot of people who need to be saving more than they are, if they hope to be able to afford a comfortable retirement."