Current retirees have greater confidence than workers in retirement plans

A recent study reveals a disconnect between the retirement expectations of workers and retirees

Current retirees have greater confidence than workers in retirement plans

Jon VoglerTime to read: 2 min

Compared with workers, current retirees have greater confidence in their ability to live comfortably in retirement, according to the 2018 edition of the annual Retirement Confidence Survey (RCS) from the Employee Benefit Research Institute (EBRI).

While the RCS found that the share of workers that feel very confident in their ability to live comfortably in retirement remains low at just 17% (with another 47% somewhat confident), 32% of retirees are very confident and 44% are somewhat confident.

The RCS found that expectations for retirement among workers differ in some respects from the experience of retirees. For example, workers expect to retire later than today’s retirees did. In addition, the survey reports a “key disconnect” regarding the subject of working during retirement: While 68% of workers expected income from working to be a “major or a minor source of income in retirement,” only 27% of retirees said they had such income.

Defined contribution plan assets

25% of workers intend to leave at least some money in their defined contribution (DC) plan, but 20% said they will use plan assets to purchase a product that provides guaranteed lifetime income — far more than the 7% of retirees who did this. 80% of DC plan participants are very or somewhat interested in an in-plan investment option that would guarantee monthly income for life in retirement.

Workers with a DC plan also express interest in longevity insurance (i.e., guaranteed income products that pay out once a specified age [80 or 85 years] is reached). Nearly half (48%) reported being very or somewhat interested in these products, compared to fewer than 20% of retirees.

Health care and Social Security considerations

Estimating future medical costs appears to be a daunting exercise for respondents in both categories. According to EBRI, only 19% of workers have attempted to calculate how much money they would need to cover health care costs in retirement; for retirees, that figure is 39%.

Additionally, 53% of workers in 2018 said their workplace retirement savings plan will be the major source of retirement (up from 47% in 2017). By contrast, workers are much less confident than current retirees about the role that Social Security will play in their retirement, according to the RCS. Only 36% of workers said they expected Social Security to be a major source of income, while 67% of retirees said Social Security is their major source of income.

The survey data suggest that many plan participants don’t know what to do with their accumulated plan assets in retirement. For example, 31% said they don’t know whether they would put the money into a rollover individual retirement account, keep the money in the plan or cash out.

Key takeaways

One of the report’s key takeaways is that DC plan ownership is an important factor in Americans’ confidence in the ability to live comfortably in retirement. The RCS found that 76% of workers with a DC plan said they were at least somewhat confident versus 46% of those without a DC plan, although 40% of survey respondents said that debt affects their ability to save for retirement. By offering participants access to financial advisors or financial well-being programs (including debt counseling), plan sponsors may be able to improve Americans’ retirement confidence. In addition, estimating and planning for health care costs can also be a critical element in retirement planning.

Read more retirement updates and views from Jon Vogler.


Pensions & Investments, “EBRI: Employees say workplace retirement plan will be a major income source as retiree,” Robert Steyer, April 24, 2018

NewsDash, “Current DC plan participants considering income products for retirement,” Rebecca Moore, April 24, 2018

Ignites, “30% of DC savers clueless on what to do with assets at retirement,” Beagan Wilcox Volz, April 25, 2018

NewsDash, “Helping retirement savers feel confident,” Rebecca Moore, April 23, 2018

Blog header image: Daniel Myjones/

Jon Vogler
Senior Analyst
Retirement Research, Invesco Consulting

Senior Analyst Jon Vogler draws on extensive pension expertise to offer retirement thought leadership for Invesco. In addition to writing Invesco’s Retirement blog, he tracks legislative and regulatory developments and contributes as a writer and editor to a variety of retirement-related Invesco communications.

Prior to joining Invesco in 2008, Jon spent more than 25 years in the research, writing, compliance and underwriting areas of the retirement services industry, including roles as a senior consultant at Mutual Benefit Life’s pension consulting firm and as a compliance manager in the Automatic Data Processing retirement services division.

Jon earned the Fellow, Life Management Institute (FLMI) and Competent Toastmaster (CTM) designations. He has a B.A. in History from Rutgers, The State University of New Jersey.

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