American's Lack Confidence When It Comes To Retirement Planning by Pat Melfi

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EBRI's in 1997 Retirement Confidence Survey found that 51 percent of current workers anticipated that personal savings would serve as their "most important" source of income in retirement. But, in 1998, that statistic dropped sharply to only 39 percent. Attempting to explain what may have changed, the authors of EBRI's 1998 Retirement Confidence Survey suggested: "One possibility is that, as more people focus on retirement, determine what they will need, and consider what they have already put aside, their confidence in their ability to save enough for retirement decreases." Consistent with this theory, the 1998 Retirement Confidence Survey found that "only 25 percent of workers are very confident that they are doing a good job of preparing financilally for retirement, compared with 32 percent in 1997."

Despite waning confidence, Americans today are more focused than ever before on retirement planning. Nearly half of all working Americans--45 percent--have attempted to calculate how much they'll need to save for retirement. In 1997, only 36 percent had tried to do that calculation. In 1996, only 32 percent made the attempt. Nevertheless, almost 60 percent of women and 51 percent of men have not yet tried to figure out how much they need to save for retirement.



According to EBRI's 1998 Retirement Confidence Survey, members of "Generation X"--generally those born from 1964 to 1980--are more confident that the members of any other generation about their retirement prospects. One in three is "very confident" they'll have enough money for a comfortable retirement, compared with 18 percent of older Baby Boomers and 22 percent of younger Baby Boomers. Experts estimate that 55 tp 64 percent of Generation X have already begun to save for retirement, primarily because of "the prevalence of 401 (k)s in the workplace today, which makes it easier for young people to start saving for retirement, and concerns about the future of Social Security as a source of retirement income.