A new report published by the Employee Benefit Research Institute and Greenwald Research finds Americans reporting a positive outlook for retirement with 67% of workers and 78% of retirees confident that they will have enough money to live comfortably throughout retirement. Confidence among retirees increased from 74% last year. The survey also finds concern about changes to the U.S. retirement system, specifically reductions in Social Security and Medicare benefits. Also, inflation remains a concern for workers on how it will impact their ability to save.
“Workers and retirees generally appear to be remaining confident about their retirement prospects. However, they are concerned that federal government programs for retirees such as Social Security and Medicare will be cut,” says Craig Copeland, director of wealth benefits research at EBRI. “The concern about Social Security is especially prominent as almost all retirees say that Social Security is a source of retirement income, and nearly as many workers expect Social Security to be an income source when they retire. In addition, workers are concerned about inflation negatively impacting their ability to spend as well as the volatility of the stock market. Not only are workers concerned about having to cut their spending, but they are also concerned that the higher costs will reduce their ability to save as much as they want.”
Key findings from the report include the following.
- Workers’ confidence remains unchanged between January 2024 and January 2025, retiree confidence sees an uptick. Majorities of Americans report a positive outlook for retirement, with 67% of workers and 78% of retirees confident they will have enough money to live comfortably throughout retirement. About seven in 10 workers are worried about making substantial cuts to spending because of inflation, the stock market being volatile and housing costs rising.
- Americans are concerned about changes to the retirement system, specifically reduction of Social Security and Medicare benefits. Despite high confidence, Americans are concerned about the U.S. government making significant changes to the American retirement system, with 79% of workers and 71% of retirees being at least somewhat concerned. Almost eight out of 10 concerned retirees report worry about a reduction to their Medicare benefits.
- Social Security remains the top source of actual and expected income for Americans in retirement. Most workers (87%) expect Social Security to be a source of income in retirement. Retirees confirm this sentiment as nearly all (94%) report Social Security as a source of income. However, nearly twice as many retirees (66%) report Social Security is a major source of income than what workers (36%) expect it to be. More retirees also report Social Security as a major source of income than last year.
- More workers expect to retire later and many plan to work in retirement. While the median expected retirement age for workers has held steady at 65 years old, a growing share reports their plan to retire at 70 years old or beyond. Two in 10 workers also adjusted their target retirement age in 2024, with most of them now planning to retire later. Retirees, on the other hand, report retiring at a younger age than workers anticipate. Most retirees, three in five, report retiring earlier than age 65 years old, with a median retirement age of 62.
- Workers would like help saving for emergencies through their retirement plan. About two-thirds of workers and three-quarters of retirees believe they have enough savings to handle an emergency expense. Additionally, almost half of workers have planned how they will cover an emergency expense in retirement. Seven in 10 workers feel they would likely use an emergency savings account that they could contribute to using payroll deduction, if available through their employer.
- Guaranteed income options are appealing to workers, especially as part of their workplace retirement plan. Among workers who are offered a workplace retirement savings plan, around three in 10 believe having investment options that provide guaranteed lifetime income to be the most valuable improvement to their plan. About three-quarters of workers, significantly more than retirees, were interested in this option.
- While expenses in retirement are higher for many, most retirees report life in retirement is about what they expected. The share of retirees reporting their lifestyle in retirement is better than expected dropped (though not significantly), with about a quarter agreeing with this statement. A bigger share of retirees also find overall expenses as expected as compared to last year, when they found expenses to be higher than expected.
