Worker skepticism about having enough money to retire comfortably has taken a nosedive in a new national survey. Just 23 percent say they're very confident about being able to pay basic living expenses in retirement. That's down from 46 percent in 2008.
The survey by Sun Life Financial Inc., which has conducted its Unretirement Index survey since 2008, shows persistent economic uncertainty and a volatile stock market have workers increasingly doubtful they'll be able to retire when they had hoped.
The steep plunge in the index comes after three years of stability. "We think that this is a tipping point relative to what we've seen in prior years," said Wes Thompson, U.S. president of Sun Life Financial.
A key finding is that a growing number of workers don't see themselves as ever fully retiring. Some 20 percent say they think they will always work in some capacity. The majority of respondents, 54 percent, plan to work beyond age 65. Within that group, 11 percent plan to stop working sometime from age 66 to 69, and 16 percent are shooting for a retirement age of 70.
A year ago there was a slight glimmer of hope that the economic doldrums were easing, but workers have lost confidence again and their skepticism has deepened.
Thompson believes the sinking feeling among workers about retirement is the result of the convergence of increased personal responsibility and the fear of millions of baby boomers who are concerned about reaching retirement age without enough money.
Intensifying pressure this year to cut government spending makes it appear that Medicare and Social Security won't be there at current levels, pulling at least a portion of the traditional security blanket out from under millions.
Those changes come at the same time the first wave of baby boomers turns 65 this year and they're finding how little they've accumulated in their savings accounts.
"They realize that they can't afford to retire, which is a radical change mentally from where they were just five years ago when owning a 401(k) looked great," Thompson said.
Workers turning 65 and in good health are realizing that they could live another 20 to 30 years in retirement.
Those factors explain why the survey shows 61 percent of workers say they plan to delay retirement and work at least another three years. That's up from 43 percent who said that in 2008.
The top reason they'll keep working? Although many will chose to continue working to stay engaged socially and to stay mentally engaged in their senior years, the main reason many cited was the bare essentials. Nearly half of all workers surveyed said they'll need a job to keep earning enough money to live on. In 2008, less than a third answered with that response.
The survey questioned 1,499 workers aged 18 to 66.
The overall index, which includes economic, personal finance, health, retirement benefit and employee benefits components slipped to 36 this year. It remained stable at 44 in 2009 and 2010. The index was 46 in the first year 2008. An index score of 100 reflects the highest confidence and the lower the score, the lower the confidence in retirement.