Confidence Drops in Retirement Health Coverage Paying Ability

May 14, 2009 (PLANSPONSOR.com) - Americans' confidence that their retirement nest egg will be enough to cover their health care bills has plummeted to the lowest level since 1992.

The data, from the 2009 Retirement Confidence Survey by the Employee Benefit Research Institute, indicate that just 25% said they were very confidence of their ability to pay their retirement health bills – the lowest since the 26% reported in 1992.

On the other hand, nearly half (46%) said in 2009 they were somewhat confident of their retirement health bill paying ability. Meanwhile, retirees’ confidence in their ability to pay for long-term care (15%) is the lowest ever measured by the annual survey, down significantly from a high in 2007 (27%).

RCS Findings

According to the 19th Annual Retirement Confidence Survey (RCS) released by the nonpartisan Employee Benefit Research Institute (EBRI), workers who say they feel very confident about retirement has tumbled by one-half in the last two years. Indeed, the percentage of workers who feel very confident about having enough money for a comfortable retirement was just 13% this year, down from the previous low of 18% set in 2008 (see Retirement Confidence Plummets in EBRI Survey ) and 27% in 2007. In fact, this is the lowest since the question was first asked in the survey in 1993 and represents a 50% decline in worker confidence since 2007 (see Markets Maul Retirement Confidence ).

Among current retirees, confidence in having a financially secure retirement also dropped this year to a new low, with only 20% saying they are very confident; that’s down from 29% in 2008 and 41% in 2007.

align="center"> 1992

align="center"> 1994

align="center"> 1999

align="center"> 2004

align="center"> 2005

align="center"> 2006

align="center"> 2007

align="center"> 2008

align="center"> 2009

You will have enough money to take care of medical expenses during retirement

Very confident

align="center"> 26%

align="center"> 30%

align="center"> 34%

align="center"> 36%

align="center"> 34%

align="center"> 42%

align="center"> 41%

align="center"> 36%

align="center"> 25%

Somewhat confident

align="center"> 32

align="center"> 31

align="center"> 34

align="center"> 36

align="center"> 39

align="center"> 32

align="center"> 36

align="center"> 34

align="center"> 46

You have enough money to pay for long-term care during retirement

Very confident

align="center"> -

align="center"> -

align="center"> -

align="center"> 30

align="center"> 23

align="center"> 22

align="center"> 27

align="center"> 24

align="center"> 15

Somewhat confident

align="center"> -

align="center"> -

align="center"> -

align="center"> 23

align="center"> 30

align="center"> 33

align="center"> 33

align="center"> 24

align="center"> 29

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