Those with Fewer Resources Less Confident of Social Security, Medicare

A Watson Wyatt news release said the opinion was particularly widespread among those without employer-sponsored retirement plans, retiree medical plans or other financial resources. The news release said confidence is especially low among those who are relatively younger, female or have a lower level of education.

Sixty-one percent of older workers (50 to 64) are not confident of receiving their promised Medicare benefits and 51% are not confident of receiving promised Social Security benefits after they retire. The analysis is based on a 2007 Watson Wyatt survey of 5,000 older employees.

Watson Wyatt said confidence in the government programs is partly associated with how secure workers are in their own financial resources for retirement. Ninety-six percent of older workers who are confident of having adequate personal resources to live on comfortably five years into retirement are also somewhat or very confident they will receive their Medicare and Social Security benefits.

However, among those unsure of their own finances, 87% are confident of receiving their full Medicare benefits, and 85% are confident of receiving their full Social Security benefits.

Of those confident of having a big enough retirement nest egg to last 20 years into retirement, 67% and 66% are also confident of receiving their promised Medicare and Social Security benefits, respectively. Of those fretting their retirement resources won’t stretch that far, these numbers fall to 44% and 41%, respectively.

“People with less overall confidence in their retirement resources are likely to worry more about Social Security and Medicare because they cannot rely on personal savings. And these fears may be further exacerbated by the recent turmoil in financial markets,” said Alan Glickstein, a senior retirement consultant at Watson Wyatt, in the news release. “Yet, this anxiety is not based only on current market pressures: With an aging U.S. population, both systems are starting to pay out benefits to a rapidly growing older population while the pool of workers paying into each is growing much more slowly.”

Older workers' attitudes towards their promised Medicare and Social Security benefits differ by age, gender, education, and income level:

• Workers at the lower end of the age range are less confident about their future benefits - those 50-54 years old are much less confident of receiving their due than those aged 54-64, when it comes to both Social Security and Medicare.
• Women tend to be less confident than men about the government making good on its Medicare promises - roughly 64% of responding women had no confidence in the system compared with roughly 58% of men. The trend was similar for Social Security.
• Generally, workers with more education have more confidence in the system - roughly 78% of respondents with less than a high school education have little to no confidence in Medicare, compared with 64% of those with a college degree and 57% of those with a graduate degree. The trend was similar for Social Security.
• The effect of income and marital status was mixed - these factors seem to have less impact than age, gender, and educational background on retiree confidence.

More information on the study s available here .