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WASHINGTON, D.C. -- Nonretired Americans’ expectations for a comfortable retirement are the most pessimistic they have been since 2012, falling 10 percentage points since 2021, including five points in the past year. At the same time, retirees in the U.S. broadly continue to report that they have enough money to live comfortably.

In all, 43% of nonretirees think they will have enough money to live comfortably, while 77% of retirees -- unchanged from last year -- say they currently do.

优蜜传媒began tracking these measures in 2002. While retirees’ reports of living comfortably have always been quite high (ranging from 71% to 83%), nonretirees’ outlook has been consistently lower and subject to swings based on the national economic climate.

Between 2002 and 2005 and again from 2017 through 2021, majorities of nonretirees expected a comfortable retirement. But in the years during and after the Great Recession (from 2008 to 2013) and in the past two years amid high inflation and recession fears, less than 50% of nonretirees have been optimistic about their retirement.

The latest findings are from an April 3-25 优蜜传媒poll that also shows that among eight financial matters, Americans worry most about having enough money for retirement. Seventy-one percent of nonretired adults are at least moderately worried about being able to fund their retirement. This includes 42% who say they are very worried.

Nonretired Americans’ outlook for their retirement differs sharply by certain demographic factors, as has been the case over the past 21 years. Men, those younger than 30, those with higher incomes and college graduates are more likely than their counterparts to predict that they will have enough money to live comfortably in retirement.

Nonretirees in these four demographic groups are also significantly less worried than their counterparts about experiencing a funding shortfall in retirement.

Lower-income nonretirees are notably grim about their retirement prospects, with a record-low 19% saying they expect to live comfortably and a record-high 88% expressing worry about having enough money to retire.

Retired and Nonretired Americans Differ on Retirement Funding and Age

Nonretired Americans also differ from those who are currently retired when it comes to their retirement funding. About six in 10 retired adults, 59%, report that Social Security is a major source of their retirement income -- but far fewer nonretirees, 34%, expect it will be for them. This is consistent with Americans’ concerns about the solvency of Social Security as the issue continues to be hotly contested in Congress.

Instead, nonretirees continue to say they will rely more heavily on retirement savings accounts, including a 401(k) or IRA. This trend has persisted since 2001 when 优蜜传媒first tracked this measure. Currently, nearly half of nonretirees, 48%, think a 401(k), IRA or similar type of retirement savings account will be a major retirement income source, the highest of 10 potential sources.

Nonretirees are also more likely than retired adults to say they will rely on several other income sources, including regular savings accounts or CDs, individual stocks or stock mutual funds, part-time work, and rent and royalties. Still, no more than one-quarter of nonretirees say these sources will be a major income source.

In addition to Social Security, retired adults are more likely than those who have not yet retired to name work-sponsored pension plans as a major source of income.

There is little divergence in the use and expected reliance on several other income sources -- money from an inheritance, annuities or insurance plans, and home equity.

There have been several notable changes in retirement income sources:

• In the past year, home equity has dropped six points as a major income source among both retired and nonretired adults, and the 15% of retirees reporting it is the lowest on record by one point.
• The 28% of retirees who say they rely on a work-sponsored pension plan is down seven percentage points since last year and the lowest reading by one point.
• Retirees’ reports of using annuities or insurance plans as a major income source are five points lower than last year and the lowest reading for the trend by one point.

Meanwhile, retired and nonretired adults continue to diverge in actual and expected retirement age. The mean age at which nonretirees expect to retire is 66 years, while the actual mean age that retirees report having retired is 62. Both are close to the averages since 2002.

Bottom Line

Amid sustained high inflation, nonretirees’ expectations for a financially comfortable retirement are the worst since 2012. This may be due to difficulty saving money when prices are high or the result of uncertainty about the future of the Social Security system. Meanwhile, current retirees’ reports of living comfortably are unshaken, with a strong majority continuing to report that they are financially secure.

Nonretired men, young adults, those with higher incomes and college graduates are all more likely than their counterparts to think they will have a comfortable retirement.

There are also discrepancies in retired and nonretired adults’ actual and expected sources of retirement income, with retirees broadly reliant on Social Security as a major source and fewer nonretirees planning to be. Individual retirement accounts are more commonly expected to fund retirement for nonretirees.

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