Confidence in comfortable retirement dips to record low

The percentage of American workers who are very confident about having enough money for a comfortable retirement is down to a record low of 13 percent, according to a new report by the Employee Benefit Research Institute. Retirement confidence was 18 percent in 2008 and 27 percent in 2007. This year’s figure is the lowest since the Retirement Confidence Survey started asking the question in 1993.

Slightly more than half of workers who responded to the January survey said 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. Twenty percent say they have less than $1,000 in savings.

The percentage of retirees confident of a financially secure retirement also dropped to a new low, with only 20 percent now saying they are very confident. That’s down from 29 percent in 2008 and 41 percent in 2007. Workers blame economic uncertainty, inflation and the cost of living for their loss of confidence. Job losses, pay cuts, loss of retirement savings or an increase in debt also contribute to the loss of confidence.

The upshot: workers expect to work longer: 28 percent of those surveyed said the age they expect to retire has changed in the last year. Workers have also cut expenses and changed the way they invest their money. They are working more hours or a second job, saving more and seeking financial advice.