Financial news in recent years might seem like a perpetual cycle of doom and gloom, caused by soaring inflation and the accompanying cost-of-living crisis. But now Americans are starting to regain confidence in their prospects for the future.
Results from a new survey of retirees indicate that a majority of working and retired Americans believe they have the money to fund a comfortable retirement. Driving this positivity are the dual factors of careful planning by workers and confidence in the future of social security.
Optimism reigns thanks to savings plans, safety nets
The Employee Benefit Research Institute released the 2024 edition of its annual Retirement Confidence Survey on Thursday in collaboration with Greenwald Research. The results are based on a survey of around 2,500 people, half of them workers and half retirees.
In the report, almost 68% of workers and 74% of pensioners expressed their opinion confidence in having enough money to live comfortably in retirement. These data represent a slight improvement compared to last year’s results, which saw a sharp decline in the confidence of both workers and pensioners from 2022; last year, only 64% of workers and 73% of retirees said they were confident in their ability to support themselves in retirement.
What has changed? The EBRI cites wage growth as one of the elements. After runaway inflation in 2022, wage growth again outpaced inflation growth last year. About 3 in 10 workers and retirees now say they feel secure thanks to the stability of their income and assets.
However, inflation remains a major concern for these countries Not feel confident that you can afford a comfortable retirement. Three in 10 non-confident workers and 4 in 10 pensioners express concern that inflation will affect their pension.
The second biggest concern for these workers and retirees is the lack of retirement savings. On a positive note, however, calculating those savings has proven to be a catalyst for saving more: Half of Americans surveyed say they’ve done the math on how much money they need for retirement, and 52% of working and 44% of retirees say they started saving more in reaction to what they discovered. Furthermore, over half of workers say they want to work to receive a salary once they retire, gradually integrating.
Another key finding of the report is Americans’ continued optimism that Social Security and other government safety nets will remain intact for the foreseeable future, playing an important role in maintaining their lifestyle in retirement.
About 9 in 10 workers say they expect to use Social Security as a source of income in retirement, and 91% of existing retirees say they already use it as a source of income.
Additionally, 8 in 10 workers were positive about the SECURE 2.0 Act’s provisions that allow employers to offer emergency savings accounts as part of their retirement plans. Access allows workers and retirees to refrain from having to dip into their retirement plans to cover emergency expenses, which 1 in 5 Americans admit to doing.
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