By Matt Egan, CNN:
Updated 2:07 PM EDT, Thu May 25, 2023,
Image by: gpointstudio/iStockphoto/Getty Images/FILE
In the latest sign of economic pessimism, Americans are growing increasingly concerned they won’t be able to retire comfortably, according to a Gallup survey shared first with CNN on Wednesday.
Just 43% of nonretired adults think they will have enough money to live comfortably when they retire, according to Gallup. That’s the lowest level for that metric since 2012.
Americans’ retirement confidence has been noticeably shaken in recent years. The percentage of adults expecting to live comfortably in retirement is down by five percentage points over the past year and ten percentage points since 2021.
Less affluent Americans are especially concerned.
A record-low 19% of lower-income adults expect to live comfortably, according to Gallup, which began tracking these measures in 2002. A record-high 88% express worry about having enough money to retire.
Gallup said the outlook of non-retirees tends to swing in tandem with the national economic climate.
Mohamed Younis, Gallup’s editor in chief, told CNN on Wednesday that the overall retirement numbers are “rather grim” and reflect lingering concerns about the high cost of living, the safety of money in bank accounts and the risk of a recession.
The high cost of living makes it harder for families to save for retirement.
“People are really feeling the pinch. Even as the rate of inflation has slowed down, people’s feel of the crunch of inflation hasn’t,” said Younis.
The Gallup poll, conducted from April 3 to April 25, finds that women are much more concerned about their retirement situation.
Just 36% of women expect to have enough money to retire comfortably, compared with 50% of men.
36% of middle-income adults expect to retire comfortably
Younger Americans are more optimistic about their retirement outlook, with 54% of those aged 18 to 29 saying they expect to have enough money to live comfortably. But just 38% of those aged 30 to 49 say the same and 39% of those 50 to 64.
Americans’ views on retirement vary significantly based on their income levels.
While just 19% of nonretired adults expect to have enough money to retire comfortably, Gallup said 36% of middle-income adults do and 65% of upper-income adults.
What’s interesting is that while non-retirees are worried about their retirement prospects, those who are already retired are not.
Gallup found that 77% of retirees say they currently have enough money to live comfortably, a figure that’s unchanged from last year despite the rising cost of living. Gallup said retirees have always had quite high views on living comfortably (ranging between 71% and 83%) — higher than those who await retirement.
Questions about the financial health and future of Social Security could be part of the reason for that divide.
Gallup found that while 59% of retired adults say Social Security is a major source of their retirement income, just 34% of retirees expect it will be for them. Those awaiting retirement expect to be forced to rely more on 401(k), IRA and other retirement savings accounts.
Americans give the economy poor marks
The Gallup findings on retirement are just the latest that point to the gloomy mood among consumers as they grapple with inflation, high borrowing costs and recession warnings.
Consumer sentiment remains historically low, dropping to a six-month low in May, according to the University of Michigan.
A CNN poll released Tuesday found that 76% of adults describe the economy as in poor shape, up from 71% who felt that way in March.
A Gallup poll released earlier this month found that just 35% of adults have a “great deal” or “fair amount” of confidence in President Joe Biden to do or recommend the right thing for the economy. That nearly matches the low confidence rating for presidents — 34% for former President George W. Bush in 2008.