Great Retirement Expectations - and Reality

Once upon a time, many workers dreamed of an early retirement, perhaps between ages 55 and 65, living financially secure. Economic uncertainty has turned this vision upside down. The 2008-2009 downturn, in particular, made many people realize that they might need to work longer than expected, not shorter.

Several recent reports bear out that retirement savings is problematic for many individuals. The Employee Benefit Research Institute (EBRI) notes that in 1998, some 24% planned to retire before age 60 and another 25% between 60 and 64, versus 9% before 60 and 14% between 60 and 64 here in 2013. Similarly, only 7% in 1998 said they would retire age 70 or later, versus 26% in 2013. 

PNC released a report whose findings echo the EBRI data. PNC found that 49% of those who have not yet retired will have to delay retirement to later than what they had planned, primarily to be able to increase savings. For those who already retired, almost six in ten (58%) retired earlier than planned, primarily due to health issues (40%) and employer actions (28%) such as layoffs or forced retirement.

A Prudential report finds that women are particularly concerned about retirement savings shortfalls. While retaining a sense of optimism, more than one-third of women are either struggling to make ends meet or are falling behind. Women are not particularly confident about saving for retirement and worry about outliving their savings.

While there may be signs of economic improvement, it is clear that many individuals are concerned about their financial well=being in retirement. Account balances may have rebounded the last couple of years, but plan participants have their work cut out for them.