Americans’ Confidence in Their Retirement Prospects Declines, New Survey Says

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The most recent Retirement Confidence Survey conducted by the Employee Benefit Research Institute (EBRI) and Greenwald Research revealed that Americans haven’t been this worried about their retirement since the financial crisis of 2008. Inflation is primarily to blame because it eats away at the future value of money while making it harder to save today.

Unfortunately, most of the 1,320 workers and 1,217 retirees surveyed believe inflation will linger. As a result, less than two-thirds of workers indicate they will have enough cash to finance their retirement. In addition, nearly three-quarters of the group plan to earn an income to supplement their investments and Social Security.

Retirees are really feeling the pinch of the elevated prices. Roughly half are spending more than planned overall, and nearly 40% say their healthcare expenses are higher than expected.

What Workers Can Do

If your last day in the office is years or decades away, you have time to save more for retirement. Try to:

• Contribute enough to your company’s retirement saving plan to get the full employer match.
• Save or invest your tax refunds and other windfalls.
• Create (and follow) a budget that you can live with long-term, one that includes saving and investing as line items.
• Prioritize your health now to reduce your potential medical expenses in retirement.
• Pay off outstanding debt — especially credit cards. Roughly 60% of workers think their debt is an issue.
• Consider moving to a less expensive area or downsizing your home.

Important: You can’t know if you’re on track for a secure retirement if you don’t know what your expenses will be. Here’s how much money you need to retire by state.

What Retirees Can Do

If you’re already out of the workforce, there are several things you can do to protect your retirement, such as:

• Keep investing. Buying more of an asset is smart when the price is low.
• Diversify your portfolio. Your investment mix should generally get more conservative as you age to better withstand stock market volatility.
• Negotiate medical bills. Don’t pay full price for health care and pocket the difference.
• Delay taking Social Security. Your benefit amount will max out at age 70, so try to wait until then.
• Maintain a rainy day fund. A sizable cash cushion can cover your expenses for several months, so you don’t have to sell your investments at a loss.

Remember: Economic downturns are temporary. Chances are good that you’ll see your investments gain value again.

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