If you read only the headlines from the latest Employee Benefit Research Institute Retirement Confidence Survey, the takeaway feels familiar: confidence is slipping, worries are rising, and concern about retirement readiness is once again in focus.
Seriously?
Look, once you move past the year-over-year decline[i] and look at the levels themselves, the picture changes shape. Yes, confidence is down from recent highs. But retirees, in particular, remain broadly confident in their ability to live comfortably in retirement despite all the “noise” about inflation, Social Security, and volatile markets. Roughly three-quarters still say they feel secure about their financial footing in retirement. That is not a fragile number. It is a resilient one.
What stands out even more is how consistently the survey shows a gap between expectations and actual experience. Workers — still on the near side of retirement — are meaningfully less confident than those already in it. That pattern shows up again in the latest Retirement Confidence Survey, and it is one of the most important, if underappreciated, dynamics in the data. And why not? The drumbeat of bad economic news, unrealistic financial expectations, dramatically inflated lump-sum healthcare costs, and yes — lack of confidence — are incessant, even in this “longest-running survey of its kind.”
Considering the headline prisms journalists — and industry surveyors — routinely put in front of people, what else could you expect?
But — and as a current retiree — let me just affirm what the RCS is (still) telling us: retirement looks more uncertain when you are looking at it than when you are living it.
That asymmetry is not surprising, but it is revealing. Before retirement, the risks are abstract and cumulative — markets, inflation, healthcare costs, longevity. They tend to stack in the imagination. After retirement, those same risks become real, but also more bounded. Income sources are visible. Tradeoffs are immediate. Decisions replace speculation.
The result is often not a dramatic sense of abundance, but something more important: manageability.
That does not mean retirees are carefree, or that pressures like inflation are irrelevant. The modest decline in confidence this year almost certainly reflects real household strain — and what I (still) consider to be a valid concern that lawmakers will fumble the Social Security (and Medicare) foundation. But it is still a decline within a relatively high band —movement from strong confidence to slightly less strong confidence, not from confidence to doubt. A slight dip, not a crash.
Let’s face it — the most overlooked (and certainly unreported) signal in the data: those actually in retirement are still, by and large, saying it works.
Not perfectly. Not uniformly. But sufficiently — and more consistently than the pre-retiree mindset — or the headlines that fuel it — would suggest.
That gap between perception and experience is not closing. If anything, it remains one of the most durable features of retirement confidence research. And it carries an important implication: the further people are from retirement, the more uncertain it tends to feel. The closer they get — or the more they experience it — the more workable it often becomes.
Unfortunately, that is not a headline story — and it’s never going to get “clicks.” But it may be the real one worth paying attention to.
And maybe, just maybe, it’s one YOU should share.
- Nevin E. Adams, JD
[i] Typical headlines included Retirement Confidence Among Workers, Retirees Slips to Lowest Point in Nearly a Decade, Retirement Confidence Falls as Social Security Concerns Mount, Workers' Retirement Confidence Hits 9-Year Low: EBRI, Americans Are Losing Confidence in Having Enough for Retirement, Survey Says - WSJ, Workers’ and retirees’ confidence for a comfortable retirement continues to decline amid fears of changing government programs - Pensions & Investments,
No comments:
Post a Comment