How employees feel about retirement amid inflation and recession concerns

Despite tumultuous economic news rattling the markets, employees are staying the course when it comes to their outlook around retirement. 

The Employee Benefit Research Institute's annual Retirement Confidence Survey found that 67% of employees and 78% of current retirees are confident they will have enough money to live comfortably in retirement. Retiree confidence in particular increased from 74% last year, though employees and retirees are concerned about potential reductions to Social Security and Medicare benefits, as well as the impact of inflation on their ability to save. 

Seventy-nine percent of workers and 71% of retirees are somewhat concerned about changes to the U.S. retirement system, with 60% of employees and 80% of retirees expressing worry that their Social Security benefits would be reduced, according to the survey. Currently, 73 million Americans receive Social Security or Supplemental Security Income, according to the Social Security Administration. Annually, $1.6 trillion is paid out to seniors. 

"The concern about Social Security is especially prominent as almost all retirees say that Social Security is a source of retirement income, and nearly as many workers expect Social Security to be an income source when they retire," Craig Copeland, director of wealth benefits research at EBRI, said in a release. "Workers and retirees generally appear to be remaining confident about their retirement prospects. However, they are concerned that federal government programs for retirees such as Social Security and Medicare will be cut." 

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Social Security anxiety looms

While the Trump administration has vowed to not make cuts to Social Security, recent layoffs and reductions at the Social Security Administration under DOGE have many seniors on edge. As of the beginning of April, 2,800 Social Security employees have taken buyouts or early retirements themselves, potentially straining services of that agency. 

Any disruptions to Social Security could cause shock waves to the millions of people who rely on this income in retirement: According to the EBRI survey, 87% of workers anticipate Social Security to be a source of income in retirement, and 36% think it will be a major source of income once they leave the workforce. For those already retired, 66% report their Social Security benefits are a major source of their monthly take home earnings. 

Retirement age creeps up

However, employees are planning to be more strategic when it comes to how they will fund their retirement years. EBRI found that more workers expect to continue working later, and work in retirement, too. Twenty percent of workers adjusted their retirement age in 2024, and a growing number of respondents anticipate retiring at age 70 or older. 

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To support employees and help them supplement Social Security benefits, three in 10 believe that retirement plans with guaranteed lifetime income would be the most valuable offering within their plan, EBRI found. Three-quarters of employees were interested in this option. 

Meanwhile, advisory services to help with retirement planning continue to be highly valued by employees: Seven out of 10 Americans said their financial service providers understand how to help them with their specific retirement goals. A robust retirement benefits plan should incorporate these elements so individuals are prepared for the full financial picture in their retirement years. 

"No matter how near or far you are from your retirement, it's never too early to start thinking about two key questions — how much you'll need to live comfortably in retirement, and what will be your sources of income," says Lisa Margeson, managing director of retirement research and insights at Bank of America. "Often, employers have resources that can help answer these questions and plan for a well-deserved transition."