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Despite Covid, Americans Are Confident About Retirement

Retirement confidence continues to be strongly related to retirement plan participation.

Nearly three in 10 Americans (29%) feel very confident in their ability to retire comfortably, according to the 2021 Retirement Confidence Survey (RCS) just published by the Employee Benefit Research Institute (EBRI).

And 80% of retirees report feeling either very or somewhat confident about having enough money to live comfortably throughout their retirement years, Craig Copeland, EBRI Senior Research Associate and co-author of the report, said in an interview.

Not surprisingly, retirement confidence continues to be strongly related to retirement plan participation, whether in a defined contribution plan, defined benefit plan, or individual retirement arrangement. Workers reporting they or their spouse have money in one of these plans are nearly twice as likely as those without any of these plans to be at least somewhat confident.

Other highlights from the survey:

Influence of debt on retirement. Workers are more likely to say that debt is a problem for them than retirees. What’s more, EBRI’s retirement confidence survey has consistently found a relationship between debt levels and retirement confidence. In 2021, for instance, about one-quarter (26%) of workers with a major debt problem are not at all confident about having enough money for a financially secure retirement, compared with 4% of workers without a debt problem.

Postponing retirement. As in prior years, there’s a big gap between when active workers expect to retire and retirees say they actually did. Workers continue to report an expected median retirement age of 65, while retirees report they retired at a median age of 62. And many of those who leave the workforce earlier than planned did so because of hardship, such as a health problem or disability, or they retired because of changes at their company. But 41% retired earlier than planned because they said they could afford to.

Working for pay in retirement. Workers are planning to retire but they are not necessarily planning to stop working. In fact, nearly three in four workers plan to work in retirement but just three in 10 retirees report they have actually worked for pay in retirement. And even though they worked for pay, many say they worked because they wanted to stay active and involved, enjoy working, or they had a job opportunity. 

Financial reasons also played a role: Some wanted money to buy extras, or to avoid reducing their savings. Some needed money to make ends meet and some needed money because of a decrease in the value of their savings or investments. And still others worked to keep health insurance or other benefits.

Have you tried to figure out how much you need? Half of workers report they and/or their spouse have tried to calculate how much money they will need to have saved so that they can live comfortably in retirement. And many workers have estimated how much income they would need each month in retirement, have planned for emergency expense in retirement, have thought about how much money to withdraw from their retirement savings and investments in retirement, have calculated how much they would likely need for health care expenses in retirement, and have thought about how they will occupy their time in retirement?

What’s more, about one-third of workers report that they (and their spouse) have worked with a professional financial adviser. Other sources of information include family and friends; online resources; employers; and representatives from workplace retirement plan providers.

Retirement and Covid. Of note, one-half of workers say the Covid-19 pandemic has not changed their confidence in their ability to live comfortably throughout retirement though one in three say their confidence was somewhat or significantly lower due to the pandemic.

Dichotomies Uncovered

Derek Klock, a professor of practice at Virginia Tech and co-author of "The Case Approach to Financial Planning: Bridging the Gap from Theory to Practice," and "The Process of Financial Planning," analyzed EBRI’s research and discovered several interesting dichotomies.

The first, he said, is that in each age category 70% or more of workers believed that they will have enough money to live throughout retirement. “However, when asked if they have enough money to last their entire life the positive response rate in each age group dropped 10% or more,” said Klock. “Does this suggest that retirement and lifetime don’t equate?”

Adding to the confounding nature of the responses is that again while 70% or more believe that they have enough money, only 60% of workers over age 55 (and less than 50% in all other age categories) have attempted to calculate how much money they need to fund retirement, said Klock.

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Furthermore, Klock noted that only 61% of workers over 55 (and less than 50% in all other age groups) have “estimated” their monthly income need. And lastly, he noted that less than 50% in all age groups have attempted to calculate how much they would need to withdraw from retirement accounts. 

“This seems to indicate that a vast number of workers are taking retirement funding and planning on faith rather than fact,” Klock said.

Another interesting differentiation is the comparison between workers and retirees when it comes to sources of retirement income, said Klock. “Sixty-two percent of retirees realize that Social Security is a major source of income, whereas only 33% of workers believe the same,” he said. “Is this telling us that workers think that they will be more financially independent than they actually turnout to be?”

Another point about sources of retirement income is that 54% of workers (versus only 20% of retirees) believe that their workplace retirement plan is a major source of income in retirement. 

“This stands as an interesting counterpoint to the fact that 33% of both retirees and workers believe personal savings to be a major source,” said Klock. “Could this mean that after so much legislation around automatic enrollment workers have come to understand the importance of employer-sponsored plan participation?”

The last point Klock made pertains to the trend in worker retirement confidence. “Interestingly there hasn’t really been one,” he said. “From the beginning of the survey in 1993 to 2007, a time period of the roaring ‘90s stock market, the internet bubble, the 2000 to 2002 recession, and the housing bubble, a nearly unwavering 30% of workers responded that they are ‘not too or not at all confident’ in their financial security through retirement," Klock said.  

"By contrast in the aftermath of the ‘Great Financial Crisis’ that response selection soared to 50% by 2011, but that response has slowly worked its way back down again to 28% this year – even as the global Covid-19 pandemic continues. It will be interesting to see if the downtrend continues, or if we once again plateau at plus/minus 30%.”

What David Nanigian, a professor at San Diego State University, found most noteworthy was this: Workers seem to desire a gradual transition to retirement rather than a full-time stop.

Actionable advice

Use better calculators, seek professional advice.  According to Klock, one action that might close the gap between actual and expected outcomes is to access one of the better online retirement planning calculators, such as the one on “It asks some fairly straight-forward questions, and takes only about 10 minutes to complete,” he said. “This will not give as complete a picture as one would get in working with a CFP professional but does at least give a thumbs-up or thumbs-down answer.”

Another calculator to consider is at

You can also search for certified financial professionals at Let's Make a Plan or PlannerSearch.

Ask for more investment choices. For his part, Nanigian said it’s clear from the survey results that workers desire a broader menu of investment choices within their workplace retirement savings plans. “Hopefully workers will express these preferences to their employers - i.e. through company surveys and through actively participating in the collective bargaining process for those who are in a union,” he said. “As my grandma says, ‘the baby who never cries doesn't get fed.’”

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