Confidence in financial readiness to retire is robust, despite the vagaries of inflation and other economic factors and the after-effects of the pandemic.  And that confidence is especially attuned to participating in a retirement plan.

The Employee Benefit Research Institute (EBRI) in its 2024 Retirement Confidence Survey reports much strong confidence. However, it’s more than twice as high among those with retirement plan coverage than among those who lack it.

Among respondents who are covered by a retirement plan, 77% of the 2,521 Americans they surveyed in January 2024 said they are at least somewhat confident that they will be financially ready to retire, and 25% said they are very confident. That’s slightly better than last year, when 74% were at least somewhat confident and 21% were very confident.

And more good news—younger generations in the workforce are more confident than their older counterparts. In a June 25 webinar hosted by EBRI, Peter Kapinos, Head of Workplace and Investment Marketing at Empower, said they found that 72% of Millennials and 71% of those they surveyed who belong to Gen Z are confident about their financial readiness for retirement, while 67% of Boomers and 63% of those who belong to Gen X feel that way.

Further, EBRI reports that 76% of those who are still employed said they are at least somewhat confident that they will have sufficient funds to cover their basic expenses during retirement However, 63% feel that way about their ability to cover their medical expenses during retirement.

Confidence among those who are not covered by a retirement plan was far lower among those they studied—in January, just 34% said they were at least somewhat confident, with a mere 5% saying they were very confident. That’s only slightly better than the confidence they expressed a year before; in 2023, 29% of those who lack coverage were confident they will be financially ready to retire, and just 4% were very confident.

How Are Savers Doing?

Many of those still employed think that they are doing a good job of preparing financially for retirement—EBRI reports that 68% said they are at least somewhat confident about that.

But what Americans believe they need to save for a comfortable retirement and their expectations about what they will be able to save for retirement may not align, according to a study by Schroders. In their U.S. Retirement Readiness Survey, they found that Americans think they will need to save $1.2 million to reach that goal; however, 46% expect to have less than $500,000 at retirement, and half of them anticipate having less than half that amount.

The percentage of those who told Empower that saving for retirement is their preeminent financial goal increases with age, according to Kapinos.

• Gen Z: 28%
• Millennials: 41%
• Gen X: 58%
• Baby Boomers: 74%

He added that 43% of those they surveyed said they wish they could go back in time so they could save more.

Concerns Remain

Despite the high levels of confidence, some concerns about retirement readiness remain.

Debt. EBRI reports that 61% of those who are still working say that debt is at least a minor problem. That’s slightly better than the percentage who said so last year.
Lisa Greenwald, CEO of Greenwald Research said during the June 25 webinar that 47% of those whom her firm surveyed said debt is hurting their ability to save for retirement.

Inflation. Craig Copeland, EBRI Director of Wealth Benefits Research, said during the webinar that 72% of respondents in their study said they are at least somewhat concerned that inflation will remain high for the next year. He also said that 69% are concerned that the cost of living will make it harder for them to save as much as they want to.

Greenwald said she has found that confidence in having enough money to keep up with inflation is growing. Similarly, Copeland said that EBRI found that concern about inflation is 7 percentage points lower this year than it was last year.

Employers Are Key

A strong majority—67%—of Empower’s respondents said they believe that an employer has a responsibility to help employees with financial planning, according to Kapinos.

Similarly, Schroders reports that 70% of their respondents say their employer-provided retirement plan is their most important retirement asset.

Kapinos suggested that employers think about their employee population and adapt their messages about saving to the particular audience they are trying to reach.