Older workers are much less confident about the outlook for their retirement security than they were two years ago, according to a survey of 2,200 workers by Watson Wyatt. Understandably, those with a pension plan are far more confident than those handling their own retirement savings through a 401(k).
The percentage of workers between the ages of 50 and 64 who are very confident about having enough to live comfortably five years into retirement fell to 44% from 63% in 2007. Asked about their outlook 15 years into retirement, only 18% are confident, down from 34% in 2007.
Retirement security is a huge concern, as individuals have seen significant amounts of their pension and retirement savings decline, said David Speier, senior retirement consultant at Watson Wyatt. And the financial crisis has been especially damaging to older workers who are worried about potential job losses and have experienced higher stress levels over the past year.
On the other hand, 55% of those with a defined benefit plan are very confident about having enough resources to live comfortably five years into retirement, and 26% are very confident looking out 15 years into retirement.
Its not surprising that DB plans offer workers more confidence, but fewer workers will be covered by them in the years ahead, noted Jamie Knopping, senior retirement consultant at Watson Wyatt. The pendulum is swinging toward 401(k)-only environments right now, but if employers find workers lack of retirement security creates issues relating to workforce transitions and reduced productivity, it may swing back to a middle ground.