Two in three workers (65%) report feeling very or somewhat confident about being able to afford basic expenses in retirement, including 26% who feel very confident, according to the Employee Benefit Research Institute’s 2017 Retirement Confidence Survey (RCS).
Workers’ confidence in their ability to afford basic expenses is higher than the confidence they report regarding their ability to pay for medical expenses in retirement. Forty-five percent of workers are not too or not at all confident they will have enough money for medical expenses in retirement. An even greater share is not too or not at all are confident in their ability to pay for long-term care expenses: nearly six in 10 (57%) do not feel confident about having enough money for long-term care in retirement.
“Workers with a retirement plan are more likely to have confidence in paying for expenses in retirement. This is because they save more,” Stephen Blakely, editor and communications director for EBRI, said in a media call.
Retirees, who are already in that life stage, express higher levels of confidence than workers in each of these financial aspects of retirement. More than four out of five retirees (85%) feel at least somewhat confident in their ability to afford basic expenses throughout their retirement years. Three in four (77%) are very or somewhat confident about having enough money to cover medical expenses, and 55% feel very or somewhat confident in their ability to pay for long-term care.
In addition, workers are more likely to say that debt is a problem for them than retirees. Nearly three in five workers (59%) say debt is a problem for them, while 40% say debt is not a problem. In contrast, just 36% of retirees say that debt is a problem for them. Workers are twice as likely to say that debt is a major problem as retirees (18% versus 9%).
The RCS has consistently found a relationship between debt levels and retirement confidence. In 2017, just 4% of those with a major debt problem say they are very confident about having enough money to live comfortably in retirement, compared with 31% of workers who indicate debt is not a problem. On the other hand, 36% of workers with a major debt problem are not at all confident about having enough money for a financially secure retirement, compared with 8% of workers without a debt problem. NEXT: Will Social Security and Medicare be there?