By Nevin Adams, EBRI

Generalizations are often misleading, but I think it’s fair to say that some people (specifically among those of the male gender) are notoriously reluctant to ask for directions—even when it’s painfully clear to everyone else traveling in their company that they are “lost.” If you’re not one of those people, I’ll bet you know someone (and probably more than one someone) who is.¹

The rationalizations offered by those refusing to seek help are as varied and variable as the individual circumstances that bring those hesitations to light: a shortage of time; certainty that, however lost they seem, they actually know where they are (or will be shortly); a lack of trust in the reliability of the instructions they might receive; the inconvenience of stopping…this despite the knowledge (frequently even among those reluctant to ask directions) that the modest investment of time to seek assistance will likely be far less than the time (and aggravation) that they will expend trying to find their own way.

When it comes to retirement planning, reluctance to seek help seems even more widespread. In fact, the 2013 Retirement Confidence Survey found that fewer than half of workers surveyed have ever tried to calculate what they need to save for a comfortable retirement (see “Guess Work?”)—and that’s not a new finding in a survey that now spans nearly a quarter-century.

The use of retirement planning “help,” in the form of on-line calculators and professional retirement advisors, has been linked to higher levels of retirement confidence—and with justification, according to new EBRI research.³ Turns out that the respondents to the 2013 Retirement Confidence Survey² in the lowest-income quartile who had sought the input of a financial advisor cited savings goals that, compared with those who did not, would reduce the risk of running short of money in retirement by anywhere from 9 to nearly 13 percentage points, depending on family status and gender. Those in the lowest-income quartile who used calculators chose savings targets that would, if they achieved those goals, decrease their probability of running short of money in retirement by anywhere from 14 to more than 18 percentage points.

Unfortunately, only about one-fourth of the sample studied (25.6 percent) used either of these two methods.

Why, then, have so few sought direction? Doubtless the reasons for not doing so mirror those above: a lack of time, a lack of confidence in the directions, or in the individual providing that assistance. Perhaps in the case of retirement projection calculators, the tools may be too hard to find, too complicated to use, or simply just one thing too much to do in an already too-busy day. This, it seems fair to say, despite the knowledge that seeking help would surely provide a better outcome.

What about those who didn’t seek help, who “guessed” at those retirement savings targets? Well, there were more in that category in the RCS sampling (44.6 percent)—and, perhaps not surprisingly, they tended to underestimate their savings needs—in effect, citing a goal that would leave them short of their projected financial needs in retirement.

Baseball great Yogi Berra once cautioned that “You’ve got to be very careful if you don’t know where you’re going, because you might not get there.” When it comes to retirement, the problem generally isn’t getting there—it’s getting there before you are ready.


¹ These individuals may be harder to spot these days with the widespread availability of GPS devices, but they can still be found.

² See the 2013 RCS, on-line here.

³ “A Little Help: The Impact of On-line Calculators and Financial Advisors on Setting Adequate Retirement-Savings Targets: Evidence from the 2013 Retirement Confidence Survey” on-line here.

Guess Work?

By Nevin Adams, EBRI



Last week a reporter asked me what finding in the 2013 Retirement Confidence Survey¹most surprised me, before acknowledging that maybe there wasn’t anything to be surprised about in a survey that has now been conducted for nearly a quarter century.Sure enough, finding that retirement confidence is (still) at an all-time low stands out when you consider that is based on sentiments over a 23-year period.² Of course, you’re also able to note that it wasn’t that long ago (2007) when those sentiments were at an all-time high.

As it turns out, the finding that stood out most to me in this year’s RCS was the response to a new question. While we have long asked about individual savings levels, and how much workers thought they would need to have accumulated by retirement in order to achieve a financially secure retirement, this year we also asked what percentage of their total household income they thought they would need to save each year from now until retirement so that they could live comfortably throughout retirement.

Granted, the most common answer—cited by 23 percent—was “don’t know/refused.” But the second-most common response was….20 percent to 29 percent.

That was an eye-opener to me. Not because we see much evidence that most individuals are actually saving at that rate³—but it does at least suggest that individuals are beginning to take seriously the amount of savings that might be required.

On the other hand, one of the RCS findings that never ceases to surprise me is the percentage of workers who say that they have ever tried to calculate how much they need to save for a comfortable retirement. This year 46 percent had done so—and while that’s less than half, it was higher than we’ve seen the past couple of years, and it was better than we’ve seen in most of the years since 1999 that we’ve asked that question (the all-time high was 53 percent in 2000).

Muting the positive message that trend might imply was the reality that those calculations often aren’t a sophisticated undertaking. Indeed, workers often guess at how much they will need to accumulate (45 percent), rather than doing a systematic retirement-needs calculation. Eighteen percent indicated they did their own estimate and another 18 percent asked a financial advisor, while 8 percent used an on-line calculator. Another 8 percent merely read or heard how much was needed.

Which brings to mind the following: Are the savings projections so high because so many workers hadn’t done a savings needs calculation? Or have they avoided doing a savings needs calculation because they thought the results would be too high?

In either event, it’s likely that their retirement confidence—and their savings goals—would be well-served by taking the time to do an actual assessment. Here’s hoping the release of this year’s Retirement Confidence Survey inspires them to do just that.


¹ See EBRI’s “2013 Retirement Confidence Survey: Perceived Savings Needs Outpace Reality for Many,” on-line here.

² For some other interesting RCS trendlines, check out this post.

³ In fact, only 8 percent of the 2013 RCS worker respondents cited as a target the 0–8 percent that many industry surveys suggest is the most common savings rate (though that often doesn’t take into account the impact of the employer match).

Confidence Builders

By Nevin Adams, EBRI

AdamsI’ll never forget my first day of driver’s ed class.  This was at a time when it was still part of the “regular” school curriculum, and we were placed in groups based on whether or not we had actually driven a car before.  Now, at the time, the extent of my driving was no more than backing the family car up and down our short driveway.  But driving looked easy enough, and my friends were in the “having driven” group, so I confidently “fudged” the extent of my experience and shortly found myself behind the wheel of the driver’s ed class car, along with my high school basketball coach/instructor and a couple of my friends in back.

To make a long story short, there was quite a bit of difference between backing a car up and down a driveway and navigating a car on the open road.  And, but for the extra brake on the instructor’s side of the vehicle, I might have spent my first driver’s ed class waiting to be pulled out of a ditch, my confidence notwithstanding.

The recent release of the 23rd annual Retirement Confidence Survey (RCS) got a LOT of attention.1  The headlines were mostly about Americans’ lack of confidence in their prospects for a financially secure retirement; indeed, the percentage “not at all confident” hit an all-time high for the RCS, while the percentage “very confident” remained at the all-time low it notched a year ago.  A striking number of inquiries about the report focused on what could be done about retirement confidence.

As it turns out, there are several things that the study linked to higher confidence: having more retirement savings is perhaps the most obvious connection, and so is participation in a workplace retirement savings plan (which was also linked to larger savings balances2).  However, the RCS also found that something as fundamental as having taken the time to do a retirement needs assessment made a positive difference in confidence3 – even though those who had done such an assessment tended to set higher savings goals.4  However, fewer than half of workers responding to the RCS have completed this assessment, and many of those who have made an attempt to figure out how much they might need – guess.5

Still, asked how much they need to save each year from now until they retire so they can live comfortably in retirement, one in five put that figure at between 20 percent and 29 percent, and nearly one-quarter (23 percent) cited a target of 30 percent or more.  Those targets are larger than one might expect, and larger than the savings reported by RCS respondents would indicate.  They do, however, suggest that some are beginning to grasp the realities of their situation – a realization that could be weighing on their confidence in the future, even as it lays the foundation for change.

Because, what really matters is not how confident you feel, but whether you have a reason to feel confident.


1 See The 2013 Retirement Confidence Survey: Perceived Savings Needs Outpace Reality for Many

2 According to the 2013 RCS , workers who participate in a retirement savings plan at work (45 percent) are considerably more likely than those who are offered a plan but choose not to participate (22 percent) or are not offered a plan (18 percent) to have saved at least $50,000. These participants are much less likely than others to report having saved less than $10,000 (20 percent vs. 46 percent who choose not to participate and 50 percent who are not offered a plan).

3 A great place to start figuring out what you’ll need is the BallparkE$timate®, available online at  Organizations interested in building/reinforcing a workplace savings campaign can find a variety of free resources there, courtesy of the American Savings Education Council (ASEC).  Choose to Save® is sponsored by the nonprofit, nonpartisan Employee Benefit Research Institute Education and Research Fund (EBRI-ERF) and one of its programs, the American Savings Education Council (ASEC). The website and materials development have been underwritten through generous grants and additional support from EBRI Members and ASEC Partner institutions.

4 The RCS found that 31 percent who have done a calculation, compared with 14 percent who have not, say they are very confident that they will be able to accumulate the amount they need, while 12 percent who have not done a calculation, compared with 3 percent who have, report they are not at all confident in their ability to save the needed amount.

5 Workers often guess at how much they will need to accumulate (45 percent), rather than doing a systematic, retirement needs calculation, according to the RCS, while 18 percent indicated they did their own estimate, another 18 percent asked a financial advisor, 8 percent used an on-line calculator, and another 8 percent read or heard how much was needed.

EBRI’s Retirement Confidence Survey to be Released March 19

On Tuesday, March 19, 2013, the nonpartisan Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates, Inc., will release results of the 2013 Retirement Confidence Survey (RCS), the nation’s longest-running and most comprehensive study of the attitudes and behavior of American workers and retirees toward all aspects of saving, retirement planning, and long-term financial security.

This is the 23rd annual RCS and will contain long-term trend data going back to earlier RCS results. Recent waves of the RCS have measured record-low levels of public confidence in the ability to afford retirement.

A teleconfrence briefing for the news media will be held 11:00–11:30 a.m. E.T. TUESDAY, MARCH 19. Reporters wishing to join the conference call or get RCS materials should contact Steve Blakely, EBRI,, 202/775-6341.

Making a “List”

By Nevin Adams, EBRI



Years agowhen my kids were still kidswe discovered an ingenious Web site1 that purported to offer a real-time assessment of your “naughty or nice” status.

As parents, we rarely invoked the name of Santa to encourage good behavior, and for the very most part our children didn’t require much “redirection.”  But no tone of voice or physical threat ever had the impact of that Web siteif not on their behaviors (they were kids, after all), then certainly on the level of their concern about the consequences.  In fact, in one of his final years as a “believer,” my son (who, it must be acknowledged, had been PARTICULARLY naughty that December) was on the verge of tears, worried that he’d find nothing under the Christmas tree but the coal and the bundle of switches he surely deserved. 

One could argue that many participants still act as though some kind of benevolent elf will drop down their chimney with a bag full of cold cash from the North Pole, that somehow, their bad savings behaviors throughout the year(s) notwithstanding, they’ll be able to pull the wool over the eyes of a myopic, portly gentleman in a red snow suit.

Next month we’ll field the 23rd annual version of the Retirement Confidence Survey,2 where we will, among other things, seek to gain a sense of American workers’ preparation for (and confidence about) retirement, as well as some idea as to how those already retired view the adequacy of their own preparations.  In previous years we’ve seen confidence wax stronger and then waneand we’ve seen distressingly low levels of preparation that sometimes seem at odds with the high confidence expressed.  However, in wake of the Great Recession, we’ve also seen a growing awareness of the need for those preparations,3 and cognizance of the challenge in doing so.  We’ve also seen regrets that more wasn’t done earlier, at a time when the options were greater, and time an asset.  

Ultimately, the volume of presents under our Christmas tree never really had anything to do with our kids’ behavior. As parents, we nurtured their belief in Santa Claus as long as we thought we could (without subjecting them to the ridicule of their classmates), not because we expected it to modify their behavior (though we hoped, from time to time), but because kids should have a chance to believe, if only for a little while, in those kinds of possibilities.

We all live in a world of possibilities, of course. But as adults we realize—or should realize—that those possibilities are frequently bounded in by the reality of our behaviors.

Yes, Virginia, there is a Santa Claus—but he looks a lot like you, assisted by “helpers” like the employer match, tax incentives, automatic enrollment and deferral increases, and qualified default investment alternatives.


(1) The Naughty or Nice site is STILL online, here.

(2) More information about the Retirement Confidence Survey, as well as results from prior years, is available online here.

(3) That first step on that path, and it’s a critical one, is to Choose to Save.®  A great place to start those preparations figuring out quickly what you’ll need is the BallparkE$timate,® available online here.  Organizations interested in building/reinforcing a workplace savings campaign can find free resources—and a handy schedule of events around which to construct a program—courtesy of the American Savings Education Council (ASEC).  Choose to Save® is sponsored by the nonprofit, nonpartisan Employee Benefit Research Institute Education and Research Fund (EBRI-ERF) and one of its programs, the American Savings Education Council (ASEC). The Website and materials development have been underwritten through generous grants and additional support from EBRI Members and ASEC Partner institutions.

“Good” Vibrations

By Nevin Adams, EBRI


Last week the Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates, Inc., unveiled the 22nd annual Retirement Confidence Survey (RCS).

Among the things we have learned after doing this survey for more than two decades: People’s confidence about retirement frequently seems out of line with the financial resources they indicate they have on hand to fund it. Of course, most (56%) of this year’s respondents admit neither they nor their spouse have made even a single attempt to determine how much they need to achieve that comfortable retirement—so it shouldn’t be too surprising that, asked how much they think they need to have saved in order to provide for a comfortable retirement, many hold forth a number that seems lower than some might expect.

While we spent a fair amount of time this week discussing the results with reporters, one question that came up repeatedly was “Why do you do this survey?  What do you hope people take from it?”

The survey itself is meaningful both for the kinds of issues it deals with and the trends it measures: Questions that, as in this year’s RCS, deal not just with confidence as a “feeling” but also the criteria that underlie and influence that sentiment. It looks at the perspective both of those already in retirement, as well as those still working and heading toward that milestone. It also (with a perspective based on two decades of conducting this particular survey) offers insights on how those feelings and factors have changed over time.

Those good reasons notwithstanding, this past week EBRI reminded reporters that the RCS has found that people who have taken the time to do a retirement needs assessment are generally more confident than those who haven’t done so, and not necessarily because they find that they are in better shape than they’d thought. In fact, most report that they set higher savings goals AFTER they had done the assessment—and were THEN more confident in their situation. That is why EBRI joined many others in 1995 to establish the American Savings Education Council (ASEC), and then the ChoosetoSave® program and the BallparkE$timate.®  Millions of Americans have used the BallparkE$timate® at to help them climb the hill to savings and greater financial security, and—according to the RCS—a more realistic view of the future.

There’s something to be said for knowing the size and extent of what was previously unknown, particularly when it comes to setting a financial goal as complex as planning for retirement can seem.

If the annual publication of the RCS does no more than remind individuals of the importance of taking the time to do so, then it’s not only good information—it’s information that does some good.

Full results of the 2012 Retirement Confidence Survey (RCS), along with the press release and seven related RCS Fact Sheets,  are now available online here. 

The 2012 RCS:Job Insecurity, Debt Weigh on Retirement Confidence, Savings

Americans’ confidence in their ability to afford a comfortable retirement is stagnant at historically low levels in the face of more immediate financial concerns about job uncertainty and debt, according to the 22nd annual Retirement Confidence Survey (RCS), the longest-running annual survey of its kind in the nation.

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 report.

Many workers report they have virtually no savings and investments, and workers’ expected age of retirement continues to rise, according to the RCS. However, one area in which Americans are saving for retirement is an employer-sponsored retirement savings plan, such as a 401(k). In fact, 81 percent of eligible workers (38 percent of all workers) say they contribute to such a plan with their current employer, according to the RCS.

These and other findings are contained in the 22nd annual RCS, conducted by the nonpartisan Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates, Inc. Full results of the 2012 RCS are published in the March 2012 EBRI Issue Brief, released today and online at 

The EBRI website also has several RCS-related fact sheets, online here. 

The EBRI press release is online here.

“Managing” Expectations

By Nevin Adams, EBRI


On March 13,(1) the Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates, Inc., will unveil the 22nd annual Retirement Confidence Survey (RCS)—the longest-running annual retirement survey of its kind in the nation. Indeed, the RCS is unique in offering a perspective on retirement that is now as long as the retirement at age 65 of those living to average life expectancy.

Consider that back in 1996, the sixth annual RCS found that 24 percent of retirees were not confident that they would have enough money to live comfortably throughout their retirement years, and more than 1 in 5 said their lifestyles were worse than when they first retired (with nearly 1 in 10 calling them “a lot worse”). The report noted that “[t]wo-thirds of those working then predicted they would work after they ‘retire,’ and nearly 40 percent of those say they think they’ll need to for financial reasons, to pay the bills and make ends meet.”

Five years later, the 2001 RCS  noted that the percentage of individuals who say they have personally saved for retirement decreased from 75 percent in 2000 to 71 percent, though that was still better than the 59 percent cited in 1998. At the time, the RCS noted that the “changes in individual behavior regarding retirement savings may in part be attributed to recent declines in consumer confidence, employment, the economy, and the equity markets.”

While a press release about the 2006 RCS stated that “RCS data over the past 12 years continue to show that retirement confidence overall among workers does not seem to be affected by either stock market performance or varying economic conditions,” subsequent events—notably the 2008 financial crisis—did seem to undermine confidence levels.

The 2010 RCS acknowledged that Americans’ confidence in their ability to afford a comfortable retirement had plunged to a new low at the same time that the recent declines in other retirement confidence indicators appeared to be “stabilizing.” And yet, just one year later, the 2011 RCS cautioned, “Instead of making fundamental adjustments to their spending and saving patterns in response to the decline in confidence, workers continue to change their expectations.”

How we view—and anticipate—retirement can have a dramatic impact on that reality, and the RCS provides valuable insights into the perspectives of those heading toward, and those already dealing with, the realities of retirement.

What matters, of course, isn’t one’s confidence about having a financially secure retirement. What matters is having taken the time and energy to actually do something about it.


(1) Full results of the 2012 RCS will be available online at the morning of Tuesday, March 13.

“Difference” Strokes

By Nevin Adams, EBRI


In response to concerns that tomorrow’s retirees will run short of money, we are often told to save more, to work longer, or—as often as not these days—to work longer AND save more. Certainly working and saving longer can do wonders in terms of stretching your retirement nest egg.

However, the timing of the retirement decision is often not within an individual’s control. In fact, the Retirement Confidence Survey has consistently found that a large percentage of retirees leave the work force earlier than planned. In fact, nearly half (45 percent) of retirees reported that they were in this situation in 2011 (see EBRI Issue Brief No. 355, March 2011, “The 2011 Retirement Confidence Survey: Confidence Drops to Record Lows, Reflecting ’the New Normal.’”

Real-world data have shown (and shown for some time now) that the median retirement age for Americans is not even as old as 65 (it’s been 62). Still, EBRI research has shown that working longer—even working past the age of 65—is no guarantee of a financially comfortable retirement.

In fact, a June 2011 EBRI Issue Brief titled “The Impact of Deferring Retirement Age on Retirement Income Adequacy” notes that, even if a worker delays his or her retirement until age 80, just 61.7% of the lowest preretirement income quartile households would have a 50 percent probability of not running out of money in retirement.

What Matters

The research notes that how workers fare financially after retirement is directly tied to three factors: their salary level at retirement, how long they work beyond 65, and whether they save in a defined contribution retirement plan during their working lifetime. In fact, the report notes that “a major factor that makes a difference” in their ability to meet basic and uninsured health-care costs in retirement is “whether they are still participating in a defined contribution plan after the age of 65.” How much difference? At least a 10 percentage point difference in the majority of the retirement age/income combinations.

Ultimately, the research should remind us of a couple of things: First, that the assumption that we’ll be able to work past “normal” retirement age is just that—an assumption. Second, and more important, even if that assumption pans out, it cannot be assumed that it will, in and of itself, prove to be sufficient.

But finally, and significantly, there is at least one thing individuals can exercise some control over in the “here and now”: their current—and continued—participation in a defined contribution plan.

And that’s something that can directly—and significantly—make a difference in building a financially viable retirement.


(1) Admittedly, except for those in the lowest- income quartile, this would be a small percentage of the population, depending on your expectations of success (see “Short” Comings). Still, according to the EBRI Retirement Security Projection Model (RSPM) baseline results, the lowest preretirement income quartile would need to defer retirement age to 84 before 90 percent of the households would have a 50 percent probability of success.

You can read more about how these factors impact retirement income adequacy online here.

EBRI Data in F.A. Article on “The Coming Retirement Wave”

July 2011 Issue

The current (July 2011) issue of Financial Advisor magazine has an interesting article on “The Coming Retirement Wave—Are Americans financially prepared for life after work?” The article uses data from the 2011 Retirement Confidence Survey (RCS) by EBRI, specifically on Americans’ self-reported savings levels and their falling confidence about being able to afford retirement.

Financial Advisor article is online here.

EBRI’s 2011 RCS is online here.