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Posted: April 15, 2008

Caregiver Dilemma: Can I Afford to Retire? Many Answer 'No'

The first baby boomers are approaching age 65, but new research suggests an increasing number are putting off retirement, because they simply can't afford it, according to the Retirement Confidence Survey.
 
The percentage of workers very confident about having enough money for a comfortable retirement decreased sharply, from 27% in 2007 to 18% in 2008, the biggest one-year drop in the 18-year history of the survey, which is conducted by the Employee Benefit Research Institute.
 
Retiree confidence in having a financially secure retirement also decreased, from 41% to 29%, a drop of 12% points.
 
Decreases in confidence occurred across all age groups and income levels but was particularly acute among younger workers and those with lower income.
 
The results indicate health costs in particular have become a big concern for retirees: among retirees who left the work force earlier than planned, more than half -- 54% -- say they did so because of health problems or disability.
 
Almost half of retirees, 44%, say they have spent more than expected on health care expenses.
 
More than half of retirees say they are now more concerned about their financial future than they were right after they retired, a 14% increase from a year ago. The figure was 40% in 2007.
 
"In the nearly two decades we have been conducting the RCS, this year's results show a very dramatic reduction in the public's confidence about having a comfortable retirement. The economy and health costs are major concerns," said Dallas Salisbury, EBRI's president. "If there is a silver lining, it's that Americans finally may be waking up to the realities of being able to afford retirement."
 
In addition, the survey found that about half of workers say they and/or their spouse have tried to calculate how much money they will need for a comfortable retirement, up considerably from the low point of 29% measured in 1996.
 
As before, the 2008 survey finds that doing a retirement savings calculation is particularly effective at changing worker behavior: 44% who calculated a goal changed their retirement planning, and of those almost two-thirds -- 59% -- started saving or investing more.
 
The survey picked up several other signs of public unease about retirement: 
 (Article courtesy of ConsumerAffairs.com)

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