Workers aren’t saving, but those who are, are doing in an employer-sponsored 401(k) plan. In total, 60% of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000. On the flip side, 81% of eligible workers (38% of all workers surveyed) say they contribute to such a plan with their current employer. 

“Workers are falling further behind, and they know it,” said Mathew Greenwald of Greenwald & Associates, which conducted and co-sponsored the annual Retirement Confidence Survey with the Employee Benefit Research Institute, released Tuesday morning. “An increased number are planning on working longer, but many retirees have told us they were forced to retire because of poor health.” 

Asked to name the most pressing financial issue facing Americans today, both workers and retirees were more likely to identify job uncertainty. “Americans’ retirement confidence has plateaued at the lowest levels we’ve seen in two decades of conducting this survey,” said Jack VanDerhei, EBRI research director and co-author of the RCS report. Just 14% of workers are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the survey low of 13% measured in 2011 and 2009).

Many workers report they have virtually no savings and investments, and workers’ expected age of retirement continues to rise. However, workers who currently participate in an employer-sponsored retirement savings plan are more than twice as likely as those who do not to report savings and investments of at least $50,000 (45% vs. 22%).

“The numbers suggest that this is a market of opportunity and the workplace is a great place because of the inefficiencies. Automatic enrollment [and escalation] work, they get more savings, we don’t have great automatic programs with employers and this indicates a level of acceptance with this,” VanDerhei said.

This is also reflected in their overall confidence, as 64% of those who are currently contributing money to an employer-sponsored retirement savings plan are either very or somewhat confident that they will have enough money to live comfortably throughout their retirement years, as opposed to only 48% of those who do not.

While many workers think they’ll be able to work longer in their careers, Greenwald said that some are certain to be disappointed: “Nearly half of current retirees surveyed they left the work force earlier than they planned for reasons beyond their control, such as health or economic changes such as job loss.” Twenty-five percent of workers in the 2012 Retirement Confidence Survey say the age at which they expect to retire has changed in the past year. In 1991, 11% of workers said they expected to retire after age 65. By 2012 that has grown to 37%.

“If you look at the basic behavioral economics of differing pain to a later time, this explains a lot of it. People are cognizant that they’re not on track, but if you give them a choice of contributing more or delaying retirement later, they’ll choose the latter. That’s’ why auto escalation can be so popular,” VanDerhei said.

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