Despite COVID, retirees feel confident in their savings

COVID hasn’t shaken the confidence retirees have in their ability to make their money last. 

The 2022 Retirement Confidence Survey, conducted by the Employee Benefit Research Institute, found that eight out of 10 retirees feel confident in their ability to live comfortably off of their savings in retirement. Seven out of 10 employees who have yet to retire also feel somewhat confident they’re saving enough.

While inflation and other economic stressors are causing a third of employees to question if they’ll be able to live comfortably in retirement, 60% of workers are still prioritizing long-term savings and investing as their top financial goals. 

“Even with the concerns of the pandemic and rising prices, overall, American workers and retirees still feel positive about their retirements,” Craig Copeland, director of Wealth Benefits Research at EBRI, said in a release. “The workers who feel less confident as a result of the pandemic are those who were the least prepared for retirement.” 

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The survey found that debt and education expenses — like paying off student loans, or saving for a child’s college fund — reduced the amount they could save. Half of workers said that debt was a major problem for their household. 

And finding financial support is a challenge for both employees and those who have already retired. Thirty-seven percent of workers and 19% of retirees do not know where to turn for financial or retirement advice. Just a quarter of workers would consider turning to their employer for this guidance. 

Yet many of those surveyed by EBRI said they were satisfied with the retirement benefits their employer offered. Eighty-two percent were satisfied with the online tools available to them that help them determine what to save. And those tools have paid off, as four out of five retirees say the expenses and lifestyle they planned for match their current expenditures. 

“When asked about preferred improvements in retirement savings plans offered, the top choices were better explanations for how much income their savings will produce in retirement, options that provide guaranteed lifetime income, and better explanations for whether they are on track with their retirement savings,” Copeland said. 

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For many current employees, retirement won’t start the moment they turn 65 — 44% plan to gradually ease into retirement and continue working before they leave the workforce entirely. Not only will this give them more time to save, it will help them visualize what they may need and how they plan to spend their savings. Travel, leisure and entertainment topped the list of how retirees plan to spend their discretionary income. 

“Spending on a fixed income and figuring out how to manage income and expenses in retirement is complicated,” Lisa Greenwald, CEO of Greenwald Research, said in the release. “I find the resilience of retirees reassuring. Majorities feel confident and are enjoying life in retirement, despite the curve balls of the past few years.”