The satisfaction of U.S. workers for their financial situation has improved compared to its level five years ago, however retirement confidence levels remain low (but improved) compared to pre-recession levels. These findings are part of discoveries made in the Towers Watson Global Benefit Attitudes Survey, which also found that workers are especially worried about the affordability of health care in retirement, forcing many to cut back spending and delaying retirement until at least 70. The survey found that, nationwide, 46 percent of respondents were satisfied with their current finances, a 26 percent increase from 2009. However, 58 percent continue to be worried about their financial future.
Confidence in the ability to retire has steadily risen since the end of the recession, but just 23 percent reported being “very confident” in their income sufficiency for the first 15 years of retirement. That confidence falls even lower when looking further into the future with a mere 8 percent feeling very confident of having adequate income 25 years into retirement.
“Employees might be on firmer financial footing now than they were five years ago, but many remain nervous about their finances and prospects for a secure retirement,” said Shane Bartling, senior consultant at Towers Watson. “This is especially true for older workers who are likely better positioned to assess their retirement income than workers overall. The financial crisis hit workers age 50 and above particularly hard, with the stock market fall creating a huge dent in their retirement savings and their confidence levels.”
Workers of all ages were found to worry about healthcare costs and only about 40 percent of employees thought that they could afford medical expenses arising within the next 12 months. Mid-career, older employees, and employees in poor health were most concerned with these expenses. Over half of all employers reported concern in an inability to afford health care into retirement. Also, 83 percent of employees said that Social Security will be less valuable in the future, while 88 percent felt the same way about Medicare.