Retirement Confidence Hits Lowest Point Since 2008: EBRI

Workers are much less sanguine about Medicare, with 51% at least somewhat confident it will continue to provide benefits that are of equal value to today, down from 57% in 2022. Still, this is way above the 28% recorded in 1992.

Seeking Guaranteed Income

Among surveyed workers who are offered a retirement savings plan, 40% said they would like investment options that provide guaranteed lifetime income, while 34% want better explanations for how much income their savings will produce in retirement and 26% want more investment options designed for their post-retirement years. Also important, 30% want better explanations for whether they’re on track with their retirement savings.

Need for Advice

Seven in 10 workers said they are confident they can choose the right investment options their workplace retirement plan offers for their situation. However, 44% admitted that they don’t understand target date funds, 33% don’t understand managed accounts and 52% don’t understand environmental, social and governance investment options.

Only 34% of respondents say they use professional sources of information and advice that can help improve their investment know-how, and just 19% turn to their workplace retirement plan provider. In contrast, 40% ask family or friends for information about retirement planning.

To Roll Over or Stay?

Thirty-six percent of workers surveyed said they will roll a workplace retirement savings plan into an IRA, 30% will keep the money in their retirement plan and 28% will cash it out and put it into another investment or savings account.

Workers 25 to 44 are likelier than those 55 or older to cash it out and put the money into another investment or savings account and purchase a product that guarantees monthly income for life. Those with $100,000 or more in savings and investments are more likely than those with less than $10,000 in savings to roll over their retirement savings to an IRA or keep the money in the plan.

Sixteen percent were uncertain what they will do with the money.

Workers say they’ll know how much to withdraw from their retirement accounts.

Sixty-four percent of workers said they are somewhat or very confident in knowing how much to withdraw from their retirement savings and investments in retirement, irrespective of age. However, those with incomes of less than $35,000 are less likely to be confident in knowing how much to withdraw than those with incomes of $35,000 or more. This is also true for those with incomes of $35,000 to less than $75,000 vs. those with incomes of $75,000 or more.