The Great Recession is having a lasting and deep impact on retirement preparation, according to a recent survey.(1) 

Just one in five (18 percent) of workers are “very confident” they are building a large enough retirement nest egg.  The majority (59 percent) say they have not yet fully recovered from the Great Recession.

Many feel they should prepare in case retirement programs such as Social Security and Medicare are cut back. Three in four workers (77 percent) are concerned that Social Security will not be there for them when they are ready to retire. Instead, many expect to rely principally on their own savings and investments. Almost half of workers (48 percent) expect their primary source of income in retirement to come from personal savings including 401(k)s, 403(b)s, and IRAs (36 percent) and other savings and investments (12 percent).

Workers’ three most frequently cited retirement fears are “outliving my savings/investments” (48 percent), “Social Security will be reduced or cease to exist in the future” (44 percent), and “declining health that requires long-term care” (41 percent).

Many workers expect to retire after age 65 or never retire. The majority of workers (54 percent) plan to work past age 65 (40 percent) or do not plan to retire (14 percent). Only 22 percent of workers plan to immediately stop working at a specific point in time. Many plan to transition into retirement by either shifting from full-time to part-time (27 percent) or moving into a less demanding or more personally satisfying role (17 percent).

However, the majority of workers (62 percent) do not have a backup plan for retirement income if they are unable to work before their planned retirement, and only 26 percent cite that they have a backup plan. Studies show that many people retire earlier than they expected, most often for health reasons.