With the U.S. economy strong and stocks near record levels, retirees’ and workers’ confidence in having enough money for retirement rose over the past year to new highs, according to a long-running survey released Tuesday.
According to the annual survey by the nonprofit Employee Benefit Research Institute, 82% of polled retirees are optimistic about their ability to live comfortably in retirement, up from 75% last year. The figure closely matches the levels recorded in 2005 and 2017 and is the highest since the survey started in 1990.
Among those who are still working, 67% are confident in their financial prospects during retirement, up from 64% last year. Today’s level is so close to the survey’s high of 69% in 1999 that it is statistically indistinguishable, said Craig Copeland, a senior research associate at EBRI. Moreover, the percentage of workers who are very confident, 23%, is dramatically higher than last year’s 17%.
Mr. Copeland said the strong economy is likely responsible for this year’s optimistic results.
“Typically, as the economy improves and workers become more confident in their current situation, it spills over to their confidence” about retirement, he said. In addition, in a strong economy, he said, many people are able to save more and take steps to plan for retirement, which also boosts confidence.
Published annually for the past 29 years, the survey provides a long-running snapshot of how Americans feel about their retirement prospects. This year’s survey of 1,000 retirees and 1,000 workers aged 25 and older was conducted in January.
The survey found that confidence among workers and retirees in having enough for both retiree medical and long-term-care expenses rose: 80% of retirees are very or somewhat confident they will have enough to cover medical expenses in retirement. That is up from 70% last year, when many retirees experienced a steep increase in the standard premium for Medicare Part B, which pays for doctor visits and other types of outpatient care. This year, the standard Part B premium for most people is $135.50, up from $134 last year. In 2017, many people paid about $109.
Some 66% of American workers said they or a spouse have saved money for retirement. On one end, 40% of workers reported that the total value of their savings, excluding home equity, is below $25,000. In contrast, 23% said they have saved $250,000 or more.
As in past years, retirees expressed more confidence than workers did in having enough for a comfortable retirement.
In general, Mr. Copeland said, it is typical for workers to be less confident than retirees because those who are further from retirement face greater uncertainty.
Of course, optimism stemming from strong economic conditions can shift. “If the economy takes a turn for the worse, these levels would likely fall as has occurred in the past,” he said. “Yet, if more people have thought about retirement and increased savings, they could still be better off than if the economy hadn’t stayed strong for this long of a period.”