2010 Retirement Confidence Survey ASEC Meeting

1. 2010 Retirement Confidence SurveyASEC Meeting Mathew Greenwald April 14, 2010 Mathew Greenwald & Associates, Inc.4201 Connecticut Ave. NW, Suite 620Washington, DC 20008Phone: (202) 686-0300 Fax: (202) 686-2512

2. 2010 RCS Methodology • 20th annual measure of worker and retiree confidence about retirement, conducted by EBRI and Greenwald & Associates • 1,153 20-minute phone interviews conducted in January 2010 using random-digit dialing with cell phone supplement • Interviewed Americans ages 25 and over • Two questionnaire versions - 902 interviews with workers (not retired) - 251 interviews with retirees

3. Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years? (2010 Workers n=902) Worker confidence about having enough money for a comfortable retirement is basically unchanged over the past year. Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

4. How confident are you that you (and your spouse) will have enough money to take care of your basic expenses during your retirement? (2010 Workers n=902) The percentage of workers very confident about having enough money for basic expenses has increased. Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

5. Please tell me how well does the following statement describe you: Over the long-run – 10 to 20 years – you believe stocks in general will be a very good investment (2010 Workers n=902, 2010 Retirees n=251) Belief in stocks show signs of rebounding. Workers Retirees Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

6. How confident are you that you (and your spouse) will have enough money to take care of your medical expenses during your retirement? (2010 Workers n=902) The decline in confidence in having enough money for medical expenses continues. Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

7. How confident are you that you (and your spouse) are doing a good job of preparing financially for your retirement? (2010 Workers n=902) The decline in confidence about doing a good job preparing financially for retirement continues. Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

8. Have you (or your spouse) tried to figure out how much money you will need to have saved by the time you retire so that you can live comfortably in retirement? (2010 Workers n=902) The percentage of workers saying they have done a retirement needs calculation has not returned to 2000 level. Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

9. How did you (or your spouse) determine this amount? Did you…? (Among workers giving an amount needed for retirement) (Top mentions, multiple responses accepted) Guess Do your own estimate Ask a financial advisor Read or hear that is how much needed Use an online calculator Fill out a worksheet or form Advice of family or friends Many guess at how much accumulation they will need for retirement. Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

10. One in four workers are planning to delay retirement. Do you now expect to retire later, at an older age than before? (2010 Workers n=902) Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

11. Why have you changed your expected retirement age? (Among workers planning to retire later, n=221) (Top mentions, multiple responses accepted) The poor economy heads the list of reasons why workers are postponing retirement. Poor economy 29% Change in employment situation 22% Finances, can’t afford to retire 16% Need to make up for losses in the stock market 12% Lack of faith in Social Security/government 7% Cost of living in retirement higher than expected 7% Need to pay current expenses first 6% Want to make sure you have enough money to retire comfortably 6% Aren’t sure how the stock market will perform 5% Health care costs 4% Law changed the minimum retirement age 4% Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

12. The proportion of workers expecting to retire after age 65, especially after age 70, is growing. Realistically, at what age do you expect to retire? (2010 Workers n=902) Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

13. Realistically, at what age do you expect to retire? (2010 Workers, n=912) Increased age for full Social Security benefits appears to have had a minor impact on target age for retirement. Expected Retirement Age Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

14. The actual age at retirement reported by retirees shows less change. How old were you when you retired? (2010 Retires n=251) Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

15. Did you retire earlier than you planned, later than you planned, or about when you planned? (2010 Retirees n=251) Perhaps this is because so many retirees leave the workforce before they had planned. Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

16. 7 in 10 workers plan to work for pay in retirement. Do you think you will do any work for pay after you retire? (2010 Workers n=902) Have you worked for pay since you retired? (2010 Retirees n=251) Percentage Saying Yes Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

17. Those who plan to work to age 70 or later are less confident than in their financial future. Not too or not at all confident that… Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc. Retirement Confidence Surveys

18. Increased intention to delay retirement has implications for retirement planning practices. • Risk of a work-ending illness or disability increases with age • Planning to work longer to get to target accumulation carries significant risk Suggestions • Compute additional target for accumulation: amount needed to support basic lifestyle (at age 62) • Suggest computation of accumulation (by age) needed for other lifestyles, so individuals can understand trade-offs