Nearly 60 percent of workers say they have a problem with debt, and a quarter of them say that their debt is worse than it was five years ago. That’s one finding of a new report by the non-profit Employee Benefit Research Institute.
Workers’ struggles with their loans are not only hindering their current financial health – those struggles are foreshadowing potential problems with retirement as well. About half of workers with a major debt problem are not at all confident about having enough money for retirement.
Despite those numbers, American workers’ confidence in their ability to afford a comfortable retirement has begun to rebound, following years of record lows during and after the recession.
More than half of workers are now very or somewhat confident they’ll have enough money for a comfortable retirement, while about a quarter are not at all confident they’ll be able to do so, according to the same report. Still, overall worker savings remain low, and the rebound in confidence is limited mainly to those who participate in a retirement savings plan.
Among workers age 55 and older, more than a third have less than $10,000 saved for retirement, and just 23 percent have $250,000 or more saved. In most cases, that’s far below the estimated eight times their annual income that most people will need to retire successfully.
Just a little over a third of workers have less than $1,000 put away in savings and investments for their retirement.
Workers whose households have saved cash in either a workplace retirement plan or an individual retirement account are twice as likely to be confident in their retirement as those who have not saved in one.
Of those surveyed, 44 percent say they or their spouse have tried to calculate the amount of money they’ll need in retirement, but those who have done a retirement calculation tend to have done a better job saving.
Given their inadequate preparation for retirement, nearly two-thirds of workers plan on working in retirement, although just a quarter of current retirees are working, according to the survey.
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