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Despite the pandemic, most Americans are still optimistic about a comfortable retirement, but inflation is the top concern among those less prepared.
That’s according to the Employee Benefits Research Institute and the 32nd annual edition of Greenwald Research. Retirement Confidence Survey surveying 2,677 workers and retirees in January.
“Even with the concerns of the pandemic and rising prices, American workers and retirees in general still feel positive about their retirements,” said Craig Copeland, director of wealth benefits research at EBRI.
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The 2022 findings hold steady compared to 2021, with more than 7 in 10 workers reporting they are at least “somewhat confident” about retirement savings, including nearly a third who feel “very confident.”
About 8 in 10 retirees believe they will have enough money to comfortably live out their golden years, according to the survey. But the pandemic dampened the optimism of a third of workers and a quarter of retirees.
“The Americans who are most likely to feel that their future looks bleak since the pandemic are those who were already pessimistic about their future, due to lower incomes, debt problems or poorer health,” Copeland said.
Unsurprisingly, inflation and rising expenses are the top concern among workers and retirees who feel less secure about retirement.
When asked an open-ended question about the specific reason for declining retirement confidence, half mentioned inflation and rising cost of living, said Lisa Greenwald, CEO of Greenwald Research.
Annual inflation has slipped higher since the survey in January, rising to 8.5% in Marchaccording to the US Department of Labor, affecting the price of everyday expenses like groceries, gasoline and housing.
However, changes in expenses during retirement can lessen the sting of some rising costsJ.P. Morgan’s 2022 Retirement Guide found. Excluding health care, retirees can spend less on other costs, like food and fuel.
While the Retirement Confidence Survey showed most retirees spending as planned, 1 in 3 said they shelled out more than expected, up from a quarter in 2021, the survey found.
“This could reflect increased use and desire for travel and leisure as the pandemic subsides,” Greenwald said. “It may also reflect inflation and the rising cost of travel and entertainment for some.
“While it’s hard to know what’s driving the higher spending, a large majority of retirees still feel their lifestyle and retirement spending are on the right track,” he added.