Tuesday, December 7

Americans Are More Confident About Retirement, New Report Shows

American workers are increasingly confident about retirement prospects, the 2014 Retirement Confidence Survey reveals. The Employee Benefits Research Institute released the results of the survey earlier this week on March 18. Experts warn that Americans should not necessarily take heart from the results. Retirees’ confidence and positive outlook may, in fact, be unfounded.

“This increased level of confidence does not appear to be founded on improved retirement preparations. In the aggregate, worker savings remain low, and only a minority appear to be taking basic steps to prepare for retirement,” the report explained. USA Today adds that 36% of Americans saved less than $1,000 for retirement and 60% admitted they had less than $25,000 set aside for retirement, also according to a recent Employee Benefits Research Institute survey. Preparations and data are similarly grim in other countries. The Canadian Life and Health Insurance Association reveals that 74% of Canadians hadn’t even begun to consider long-term plans for retirement.

Still, retirees’ confidence is climbing, the report shows. Confidence levels are up to 18%; by contrast, only 13% of employees described themselves as “very confident” about retirement just last year. Americans are more confident “not because they’re better at planning,” CNBC explains, “but because stock market returns and property values have climbed.” Moreover, “Improvement in confidence is largely limited to higher earners and those with IRAs and 401(k)s,” CNBC adds.

The spike in confidence and outlook is still relatively low. Having up to 18% of Americans confident in a comfortable retirement is good, but it’s not great. Greg Burrows, senior vice president of Retirement and Investor Services at the Principal Financial Group, advises that there are simple steps Americans and Canadians (and people all over the world) can take to feel better about retirement. “People feel better if they’re participating in a 401k or other plan. The key message is that people who are taking action are the ones that are feeling more confidence,” Burrows told CNBC.

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