Most workers have saved just $25,000 for retirement

By Blake Ellis, staff reporter


NEW YORK (CNNMoney) -- Most Americans have less than $25,000 saved up for retirement. And surprise!: Retirement confidence is at record lows.

More than a quarter, or 27%, of workers say they are "not at all confident" about retirement, according to an annual survey from the Employee Benefit Research Institute and Mathew Greenwald & Associates Inc. That's up from 22% last year, which was the lowest level recorded in the two decades the survey has been conducted.

Meanwhile, only 13% of workers are "very confident" about having enough money to retire, which is unchanged from 2009.

While this sounds dismal, EBRI says it's about time people started waking up to reality. And this drop in confidence may simply be a sign that people are finally realizing how much they must save, instead of being overly confident as they have been in previous years.

For example, confidence among the worst savers slipped sharply this year. The number of workers with savings of less than $25,000 and who reported being "not at all" confident about their retirement savings surged to 43% this year, from only 19% in 2007.

"People are increasingly recognizing the level of savings realistically needed for a comfortable retirement," said Jack VanDerhei, EBRI research director and co-author of the report. "We know from previous surveys that far too many people had false confidence in the past."

About 56% of workers report having less than $25,000 in savings and investments (not including the value of their primary home and benefit plans) and 29% of workers have less than $1,000 saved.

Plus, while 59% of workers say they are currently saving for retirement, about a third of all Americans -- 34% of workers and 33% of retirees -- were forced to tap into their savings last year just to cover basic expenses.

"People's expectations need to come closer to reality so they will save more and delay retirement until it is financially feasible," said VanDerhei.

About 20% of workers said they now plan to retire later than they had desired, with the number of people expecting to retire after age 65 rising to 36%, compared with 25% in 2006.

The poor economy is the top reason people are delaying retirement this year, followed by "a lack of faith in Social Security or the government," a change in their employment situation, or simply because they can't afford it.

About 74% of workers now plan to hold paying jobs in retirement, which is up from 70% in 2010 and triple the percentage of current retirees who say they worked for pay in retirement.

Nearly half of current retirees say they retired earlier than they had intended, due mainly to health problems or disability. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.96%3.94%
15 yr fixed3.08%3.03%
5/1 ARM3.33%3.33%
30 yr refi4.04%4.02%
15 yr refi3.16%3.09%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,057.81 83.50 0.49%
Nasdaq 4,529.68 -19.55 -0.43%
S&P 500 1,979.45 -2.85 -0.14%
Treasuries 2.28 -0.04 -1.68%
Data as of 10:44am ET
Company Price Change % Change
Facebook Inc 73.60 -2.26 -2.98%
Bank of America Corp... 16.92 -0.07 -0.41%
Intel Corp 33.21 -0.71 -2.09%
Avon Products Inc 10.17 -0.79 -7.21%
Apple Inc 106.77 -0.57 -0.53%
Data as of 10:28am ET

Sections

Apple CEO Tim Cook writes column in which he announces that he's gay: "I consider being gay among the greatest gifts God has given me." More

Marc Andreessen says venture capital funding is likely to increase as tech startups touch more sectors. More

In cities across the United States, millions of people will be kicked out of their homes this year. Some can't afford their soaring rent, others are getting evicted over minor violations by landlords eager to get higher paying tenants in place. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.