A new survey says Americans' confidence in their ability to afford a comfortable retirement has recovered slightly from the record lows of the past five years-primarily among those participating in retirement plans. But overall, actual preparations for retirement haven't improved.

The Retirement Confidence Survey, released by the nonpartisan Employee Benefit Research Institute (EBRI) in Washington, and co-sponsored by the Principal Financial Group ®, finds:

  • Eighteen percent of workers are now very confident, up from 13 percent in 2013
  • Retiree confidence increased even more with 28 percent now very confident, up from 18 percent in 2013

The increase in confidence was almost exclusively among those with higher household income and those participating in a retirement plan-defined contribution, defined benefit, or individual retirement account (IRA). The percent of workers in a plan who are very confident increased from 14 percent in 2013 to 24 percent in 2014. Only nine percent of those not in a plan were very confident, essentially unchanged from 10 percent in 2013. Workers without a plan are four times (46 percent) more likely to say they are not at all confident about retirement than those with a plan (9 percent).

Overall reported worker savings remain low and only a minority appear to be taking basic steps to prepare for retirement. Managing daily expenses and the cost of living are the number one reasons workers give for not saving more. Debt is a problem for 58 percent of workers. The exception is among those who have taken some kind of action to plan and save.

"Our analysis shows those who are participating in a retirement plan, have calculated their savings need or worked with a financial professional are not only more confident, they have less debt and higher levels of savings," said Greg Burrows, senior vice president of retirement and investor services at The Principal®. "Having a plan for both spending and saving can help manage short term needs and pave the way for more security in the future. The key is to take action."

The Principal analysis of the survey data found those in a retirement plan were twice as likely to calculate their retirement need, receive investment education from a financial professional and report they retired as planned.

Among other key findings available on the EBRI website at www.ebri.org:

  • Workers have high savings goals: Twenty-two percent of workers say they need to save between 20 and 29 percent of their income. Another 22 percent indicate they need to save 30 percent or more. However, those without a retirement plan (IRA, defined contribution, or defined benefit) are more likely to set the target at 50 percent of income or to say they don't know how much they need to save.
  • Most haven't calculated savings needs. Only 44 percent of workers report they and/or their spouse have tried to calculate how much money they will need to have saved for a comfortable retirement. But workers who do, tend to have higher levels of savings and confidence than those who have not.
  • Best laid plans: Sixty-five percent of workers expect to work for pay in retirement but only 27 percent of retirees report they actually do work for pay in retirement. Nearly half say they retired earlier than planned due to health reasons.

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