Tuesday, October 25, 2011

The Drop in Retirement Confidence

Americans' confidence in their ability to retire comfortably has been declining lately, according to the annual retirement survey conducted by SunLife Financial. That's no surprise, given the economic environment we've been living in the past few years. What is surprising, though, is the timing. While the confidence level stayed relatively stable from 2008 to 2010, it dropped suddenly by 18 percent in 2011.

The thing that's changed is people's confidence in their ability to pay for their basic living expenses in retirement. In December 2008, after the recession had already been in effect for a year, 46 percent of Americans said they were very confident they'd be able to pay for their retirement expenses. Only 14 percent said they were "not at all" confident.

Now those numbers have reversed. In the 2011 survey, more respondents - 28 percent - said they were not at all confident about their retirement than those who said they were very confident (23 percent). The biggest issue here may be a lack of confidence in government: Confidence about Social Security has dropped from 22 percent in 2008 to 9 percent now, and confidence about Medicare has dropped from 20 percent to 8 percent.

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