How confident are you about your prospects for a secure retirement?

I have been retired (sort of, I still have two very part time jobs) for a little over two years. I am fortunate to have a pension along with Social Security and after working forty-eight years, some savings as well. However, in the first two years of retirement my confidence in a secure retirement has been shaken a few times by high medical bills and unexpected high expenses like $4,000 to have trees cut following a storm.

I obsessed over my retirement planning. I knew my exact income in retirement and had a good estimate of expenses many years before I retired and updated the information frequently. In retirement I watch both expenses and finances carefully (a little too carefully according to my wife).

I am from another generation, a generation whose parents lived through the great depression as young people. Now look at the results of the survey shown below. It’s scary stuff, is it not? Little or no savings, more reliance on Social Security (designed as a safety net, not primary income source), and little planning happening. This does not bode well for the future, especially given the state of Medicare and Social Security.

We can’t blame this all in the economy of the last five years. In fact, saving and long term planning have never been top priorities for most people.

The 2012 Retirement Confidence Survey: Job Insecurity, Debt Weigh on Retirement Confidence, Savings March 2012 EBRI Issue Brief #362 Employee Benefit Research Institute, 2012

Executive Summary :   Americans’ confidence in their ability to retire comfortably is stagnant at historically low levels. Just 14 percent are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the low of 13 percent measured in 2011 and 2009).

Employment insecurity looms large: Forty-two percent identify job uncertainty as the most pressing financial issue facing most Americans today. Worker confidence about having enough money to pay for medical expenses and long-term care expenses in retirement remains well below their confidence levels for paying basic expenses.

Many workers report they have virtually no savings and investments. In total, 60 percent 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.

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 percent of workers said they expected to retire after age 65, and by 2012 that has grown to 37 percent.

Regardless of those retirement age expectations, and consistent with prior RCS findings, half of current retirees surveyed say they left the work force unexpectedly due to health problems, disability, or changes at their employer, such as downsizing or closure.

Those already in retirement tend to express higher levels of confidence than current workers about several key financial aspects of retirement. Retirees report they are significantly more reliant on Social Security as a major source of their retirement income than current workers expect to be.

Although 56 percent of workers expect to receive benefits from a defined benefit plan in retirement, only 33 percent report that they and/or their spouse currently have such a benefit with a current or previous employer.

More than half of workers (56 percent) report they and/or their spouse have not tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement.

Only a minority of workers and retirees feel very comfortable using online technologies to perform various tasks related to financial management. Relatively few use mobile devices such as a smart phone or tablet to manage their finances, and just 10 percent say they are comfortable obtaining advice from financial professionals online.

Somebody is in for a bumpy ride in the future, especially given that our current mode of spending and borrowing will come due sometime when these folks are living in retirement.