Retirement confidence of working Americans dropped

After remaining stable for three years, retirement confidence dropped nearly 20% this September compared to a year earlier, according to today’s U.S. release of the Unretirement Index^SM, a poll of nearly 1,500 working Americans by Sun Life Financial Inc. (NYSE:SLF, TSX:SLF).

American workers’ trust in their future retirement has reached a four-year low. Retirement confidence drops nearly 20% in 2011.    One in five working Americans plan to never retire.               Owners of annuities, long-term care insurance feel more confident.                              

Confidence compared to last year deteriorated in all five of the Index’s components, with the greatest drop (-31.7%) occurring in confidence about the benefits needed to retire, including defined benefits plans and employee health benefits.  

• Only 23% of working Americans feel very confident that they will meet basic living expenses in retirement—down from (42%) last year.
• One in five working Americans say they will never retire.
• Confidence in the future of Social Security has dropped to 9% in 2011 from over 22% in 2008.
• Confidence regarding Medicare benefits is also down to 8% in 2011 from over 20% in 2008.
• On the positive side, respondents who expect to receive guaranteed lifetime income from annuities by age 67, or who own long-term care insurance products, feel significantly more confident about retirement.

“This represents the most significant drop in retirement confidence we’ve seen in the four years we’ve compiled the Sun Life Unretirement Index,” said Wes Thompson , President, Sun Life Financial U.S. “Although the recession officially ended in 2009, average Americans feel that the downturn has not ended for them, which is substantially eroding their trust in their retirement future.” 

This information is not intended as and should not be construed as investment, tax or legal advice.