Retirement confidence rises

NEW YORK — Workers are more confident about having enough savings for retirement even after the percentage of savers declined, according to the Employee Benefit Research Institute.

The percentage of U.S. workers who said they were “very confident” about having enough money for retirement was 16 percent, up from 13 percent in 2009, which was a 20-year low, according to the survey released Tuesday by Washington-based EBRI. Sixty percent of workers said they’re currently saving for retirement, down from 65 percent in 2009, the study indicated.

Some employers last year temporarily suspended company matches to 401(k) retirement plans, which lowers a worker’s incentive to save, said Jack VanDerhei, research director for EBRI and one of the report’s authors. Once the matches are restored people will save at a higher level again, he said.

Some workers have stopped saving but their confidence hasn’t decreased, VanDerhei said.

The nonprofit EBRI, which studies employee benefits, surveyed 1,153 individuals by telephone age 25 and older in January. The study was co-sponsored by EBRI and Mathew Greenwald & Associates, also based in Washington.

Concerns about affordable medical care are increasing, according to the survey. Fifty-one percent of workers said they’re not confident about being able to pay for medical expenses, compared with 44 percent in 2009. In addition, 61 percent are not confident about paying for long-term-care expenses, compared with 56 percent in 2009.

“We shouldn’t be surprised that confidence seems to be tracking the S&P pretty closely,” said Dan Houston, president of retirement insurance and financial services for Des Moines-based Principal Financial Group, one of the study’s underwriters. “We’ve reached a bottom in terms of lost confidence.”

A record low percentage of U.S. workers were very confident about their retirement security in April 2009, according to EBRI. At that time, a 45 percent drop in the S&P 500 since October 2007 had erased more than $2 trillion in retirement assets.

More employees expect to work past age 65, according to this year’s study. Twenty-eight percent of workers said they plan to retire before age 65 in 2010, compared with 50 percent in 1991.

Fidelity Investments, in a separate survey released Feb. 17, said the average 401(k) retirement account balance was $64,200 at the end of 2009, up 28 percent from a year earlier, according to Michael Doshier, vice president of the workplace investing group. Accounts are still down from 2007 when the average balance was $69,200, Doshier said. The data are based on 11 million workers’ retirement accounts held by the Boston-based firm.

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