The Employee Benefit Research Institute’s (EBRI’s) 2016 “Retirement Confidence Survey” provides helpful insights on employee behavior and benchmarking data for plan sponsors striving to help their employees attain retirement preparedness. When it comes to retirement preparation, the study indicates that confidence often doesn’t correlate to the underlying facts. Closing the perception/reality gap remains a significant challenge for many plan sponsors.
A Closer Look at the Numbers
According to the EBRI, overall confidence levels (covering active retirement plan participants as well as those not currently covered by a plan or a spouse’s plan) have essentially remained flat during the past two years, following a rebound after the 2008 financial crisis. In the latest survey:
- 21% of workers report that they’re “very” confident about having enough money for a comfortable retirement,
- 42% are “somewhat” confident,
- 16% are “not too” confident, and
- 19% are “not at all” confident.
A bit of good news for plan sponsors: Employee confidence about having enough money for a comfortable retirement correlates with whether they or their spouse participates in a plan. For example, 26% of plan participants report they’re “very confident,” vs. only 10% of nonparticipants.
Retirement confidence also correlates with personal debt burdens. According to the study, 32% who report that debt isn’t a problem are very confident about their retirement prospects, compared to 9% for whom debt is a major issue.
A relatively large (28%) proportion of employees award themselves high marks for their ongoing efforts to prepare for retirement. 43% report being “somewhat confident” about the job they’re doing, with the remainder nearly evenly split between those who aren’t too confident or not at all confident about the matter.
Perception versus Reality
Authors of the EBRI report found a disconnect between retirement confidence levels and actions. In 2009, a year that marked the beginning of an upswing in retirement confidence, the percentage of workers who reported they and/or their spouse had