The outlook of Americans towards their retirement plans has worsened over the past year according to a recent Gallup poll, with concerns about rising prices and recession sapping away optimism.
“Between 2002 and 2005 and again from 2017 through 2021, majorities of nonretirees expected a comfortable retirement,” Gallup said.
“But in the years during and after the Great Recession (from 2008 to 2013) and in the past two years amid high inflation and recession fears, less than 50 percent of nonretirees have been optimistic about their retirement.”
“Overall financial well-being declined markedly over the prior year. Seventy-three percent of adults were doing at least okay financially in 2022, down 5 percentage points from 2021.”
Demographic and Retirement Expectations
In the Gallup poll, non-retired women were found to be more worried than men when it came to concerns about having enough money to live comfortably after retiring. While 50 percent of male participants expect a comfortable life, only 36 percent of the female participants expect the same.In terms of age, 54 percent of individuals between 18 and 29 years foresee a comfortable retired life compared to just 38 percent among 30 to 49-year-olds and 39 percent among 50 to 64-year-olds.
While 65 percent of upper-income individuals see a comfortable life after retiring, this figure drops to 36 percent among middle-income individuals and then to just 19 percent among those in the lower-income group.
The dip in retirement expectations is happening amid concerns about the health of the U.S. economy. A Gallup survey conducted in April found that 75 percent of Americans believe the condition of the economy is worsening, up from 72 percent in March.
Stress From Inflation and Debt
According to the 2023 Retirement Confidence Survey report (pdf) published by Greenwald Research and the Employee Benefit Research Institute, concerns about inflation and debt levels have spiked among workers.The survey found that 84 percent of workers were worried the rising cost of living will make it harder to save money. Four in ten expressed not being confident that their money will keep up with inflation during retirement, which is a “significant increase” from the one-third of workers who felt this way in 2022.
“Workers’ debt problems appear to be worsening. Significantly up this year, over 6 in 10 workers report their debt is a problem,” the survey report said. Almost half of the workers admitted that debt was impacting their ability to save for a comfortable retirement.
“Workers worry that their salaries won’t keep up with inflation and report more debt, while retirees worry about cost of living and expenses,” said Lisa Greenwald, CEO of Greenwald Research, according to an April 27 press release.
“Half of retirees report that their overall spending is higher than expected, an increase over last year’s one-third, and the share of retirees who feel their retirement lifestyle is worse than they expected is slowly growing.”