Retirement plan is key to confidence, savings

Retirement confidence is highest among workers who say they or their spouse have a retirement plan, such as a work-sponsored plan or an individual-retirement account (IRA). 

That’s according to new research from the Washington, D.C.–based Employee Benefit Research Institute (EBRI).

Vicki Brackens, president & financial planner at Brackens Financial Solutions Network LLC, shared the research results in an email sent to those on her email list, including CNYBJ.

Brackens is a registered representative of Lincoln Financial Advisors Corp. Brackens Financial Solutions Network is not an affiliate of Lincoln Financial Advisors.

EBRI is a private, nonprofit public-policy research organization that focuses on health, savings, retirement, and economic-security issues.

In its 2015 Retirement Confidence Survey, EBRI found that 28 percent of those with a retirement plan said they were “very confident” about their ability to afford retirement, compared with just 12 percent of those without a plan.

Brackens “absolutely” agrees with the finding. She spoke with CNYBJ on May 26.

When a person can see progress or “see into their future” versus guessing what their future may be, they’re “always” going to have more confidence, says Brackens.

“So when you are systematically saving through a retirement plan, you can now actually have concrete data to visualize what the result may be,” she adds.

In considering their retirement years, Brackens suggests people “stop, think, and really assess” how they want to live in retirement.

Will they be sitting in a rocking chair, working part time, or changing careers? she asks.

“It requires that you go through a series of questions and really reflect on what wealth or what life you would like … how that life should play out,” says Brackens.

From there, an individual should build an income strategy that meets their longevity and health-care needs.

Other findings

Having a plan not only boosts retirement confidence, but also increases savings. The survey found that 34 percent of workers who said they or their spouse have a retirement plan had saved at least $100,000 for retirement, while 64 percent of those without a plan say they had saved less than $1,000.

“Those without a retirement plan seem to understand they are likely to have difficulties accumulating adequate financial resources for retirement,” Jack VanDerhei, 

EBRI research director, said in the EBRI news release. “Forty-four percent of workers without a retirement plan are not at all confident about having enough money for a comfortable retirement, compared with only 14 [percent] of those who have a plan.”

EBRI found that overall retirement confidence “continues to rise” from the lows of the 2009 to 2013 period, as 22 percent of workers were very confident in their prospects for retirement in the 2015 survey, compared with 13 percent in 2013. The percentage of workers saying they are not at all confident remained statistically unchanged at 24 percent.

Retirees also exhibited a “brighter outlook,” with 37 percent saying they were very confident in their ability to afford retirement in 2015, compared with just 18 percent in 2013.

The cost of living and day-to-day expenses were the top reasons for not saving (or not saving more), with half of workers reporting these factors as “deterrents.” 

Despite these factors, however, nearly 70 percent said they could save at least $25 more per week than they had been setting aside.

Although the percentage of workers reporting strong confidence in their ability to pay for medical and long-term care costs, they have increased over the past several years; the 2015 percentages are “still cause for concern.” Just 18 percent of workers said they are very confident they will have enough for medical expenses in retirement, while 14 percent said they were very confident about paying for long-term care costs.

The survey found 16 percent of employees said the age at which they expect to retire has changed over the past year; eight out of 10 of those people said they expect to retire “later than planned.” 

Unfortunately, these workers may be in for an “unexpected surprise,” as many retirees reported that they had to leave the workforce earlier than planned due to “factors beyond their control.”

EBRI co-sponsored the 25th annual Retirement Confidence Survey with Greenwald & Associates, a Washington, D.C.–based, market-research firm. 

Researchers conducted the survey in January and February 2015 through 20-minute telephone interviews with 2,004 people, including 1,003 workers and 1,001 retirees, according to EBRI.        

Retirement confidence is highest among workers who say they or their spouse have a retirement plan, such as a work-sponsored plan or an individual-retirement account (IRA). 

That’s according to new research from the Washington, D.C.–based Employee Benefit Research Institute (EBRI).

Vicki Brackens, president & financial planner at Brackens Financial Solutions Network LLC, shared the research results in an email sent to those on her email list, including CNYBJ.

Brackens is a registered representative of Lincoln Financial Advisors Corp. Brackens Financial Solutions Network is not an affiliate of Lincoln Financial Advisors.

EBRI is a private, nonprofit public-policy research organization that focuses on health, savings, retirement, and economic-security issues.

In its 2015 Retirement Confidence Survey, EBRI found that 28 percent of those with a retirement plan said they were “very confident” about their ability to afford retirement, compared with just 12 percent of those without a plan.

Brackens “absolutely” agrees with the finding. She spoke with CNYBJ on May 26.

When a person can see progress or “see into their future” versus guessing what their future may be, they’re “always” going to have more confidence, says Brackens.

“So when you are systematically saving through a retirement plan, you can now actually have concrete data to visualize what the result may be,” she adds.

In considering their retirement years, Brackens suggests people “stop, think, and really assess” how they want to live in retirement.

Will they be sitting in a rocking chair, working part time, or changing careers? she asks.

“It requires that you go through a series of questions and really reflect on what wealth or what life you would like … how that life should play out,” says Brackens.

From there, an individual should build an income strategy that meets their longevity and health-care needs.

Other findings

Having a plan not only boosts retirement confidence, but also increases savings. The survey found that 34 percent of workers who said they or their spouse have a retirement plan had saved at least $100,000 for retirement, while 64 percent of those without a plan say they had saved less than $1,000.

“Those without a retirement plan seem to understand they are likely to have difficulties accumulating adequate financial resources for retirement,” Jack VanDerhei, 

EBRI research director, said in the EBRI news release. “Forty-four percent of workers without a retirement plan are not at all confident about having enough money for a comfortable retirement, compared with only 14 [percent] of those who have a plan.”

EBRI found that overall retirement confidence “continues to rise” from the lows of the 2009 to 2013 period, as 22 percent of workers were very confident in their prospects for retirement in the 2015 survey, compared with 13 percent in 2013. The percentage of workers saying they are not at all confident remained statistically unchanged at 24 percent.

Retirees also exhibited a “brighter outlook,” with 37 percent saying they were very confident in their ability to afford retirement in 2015, compared with just 18 percent in 2013.

The cost of living and day-to-day expenses were the top reasons for not saving (or not saving more), with half of workers reporting these factors as “deterrents.” 

Despite these factors, however, nearly 70 percent said they could save at least $25 more per week than they had been setting aside.

Although the percentage of workers reporting strong confidence in their ability to pay for medical and long-term care costs, they have increased over the past several years; the 2015 percentages are “still cause for concern.” Just 18 percent of workers said they are very confident they will have enough for medical expenses in retirement, while 14 percent said they were very confident about paying for long-term care costs.

The survey found 16 percent of employees said the age at which they expect to retire has changed over the past year; eight out of 10 of those people said they expect to retire “later than planned.” 

Unfortunately, these workers may be in for an “unexpected surprise,” as many retirees reported that they had to leave the workforce earlier than planned due to “factors beyond their control.”

EBRI co-sponsored the 25th annual Retirement Confidence Survey with Greenwald & Associates, a Washington, D.C.–based, market-research firm. 

Researchers conducted the survey in January and February 2015 through 20-minute telephone interviews with 2,004 people, including 1,003 workers and 1,001 retirees, according to EBRI.