First Person: My Retirement Confidence Is Shot

Yahoo Contributor Network

I'm not at all confident about my retirement plans, but not because I have a lot of credit card debt. According to a new study released by Employee Benefit Research Institute, I'm not the only worker who is worried about having enough for retirement. A recent article by Business Insider pointed out that one in three workers are lack retirement confidence. In fact, the study showed 57 percent of workers have less than $25,000 set aside for retirement. More than half of those people say debt is preventing them from saving enough for retirement.

Hitting a record low

What's interesting is that the low retirement confidence levels are the worst in the study's 23-year history. People are worried about retirement even though most recent studies show that 401(k) balances have recovered since the recession. I know my 401(k) balance is back to even, but I haven't seen any dramatic increase in my overall balance. Watching my IRA balance rise a few hundred dollars isn't going to translate into enough money for me to spend my retirement drinking expensive Dom Perignon champagne or taking voyages to the Caribbean on the luxurious Queen Mary 2.

Dealing with rising costs

It's difficult to focus on retirement savings when I need to pay day-to-day bills and expenses. According to the study, 42 percent of people said that current living expenses stand in the way of their retirement savings. While I don't have any credit card debt, I am constantly spending money on expenses such as car repairs and new appliances to replace ones that have broken. Also, every time I go to the grocery store with my same standard shopping list, it seems its costs more.

Taking a shot in the dark

Another reason my retirement confidence is so low is because I have no clue how much I'll need in retirement. I can't predict with any real accuracy how much money we will get from Social Security as a "supplement." Some people believe my Generation X will receive nothing in the way of a Social Security benefit. Other experts insist Generation X will have their Social Security benefits reduced by 30 percent when they retire due to the problem with the Social Security system. If I take Social Security out of the equation, I'm still not sure how much I'll need. The survey indicated people who consulted a financial planner or used a financial calculator were 20 to 40 percent more confident than people who did not. Even if I knew how much I'd need, I'd wonder how I would save that much.

Ultimately, it's difficult to feel confident about retirement when I don't feel confident about the most important work years of my life. Now that I'm 40, I'm entering that critical midlife stage of my work life when I need to reach my highest earning potential. But in my real world, I'm dealing with pay cuts and furloughs or unpaid days off. Until the economy starts booming again, I'm not sure how I'll be able to believe in a golden retirement.

*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

More from this contributor:

My backup plan for involuntary retirement

When retired people hit their debt ceiling

I'm neglecting my retirement accounts
View Comments