Americans struggling to cope with the double whammy of rising healthcare costs and the economy spluttering to a halt are cutting back sharply on retirement saving, with the numbers confident they will be all right financially in their old age now down to their lowest since the last recession of 2001.
An annual survey of more than 1,300 people by the Employee Benefit Research Institute has found barely six out of 10 workers now say they feel "very" or "somewhat" confident of having enough money for retirement.
This is down from the seven out of 10 reported last year – itself barely enough to stave off a retirement crisis – and the poorest showing since 63 per cent recorded in 2001 when the economy was in recession, pointed out the institute.
The percentage of workers in the "very confident" category had dropped to 18 per cent this year, down from 27 per cent last year, with the nine point drop being the biggest in the survey's 18 years history, it added.
Confidence among already retired workers also fell, with fewer than a third saying this year they were "very confident" they had enough for a comfortable retirement, down from four out of 10 in 2007.
Temple University business professor Jack VanDerhei, co-author of the study, said workers and retirees were clearly reacting to rising gas prices, declining home values and dropping portfolio balances.
All this had led to reduced consumer spending and tighter finances, with long-term saving the first to be squeezed.
But he said: "I think more workers are beginning to factor in all the various information they've been given, especially the need for additional retirement funds just for the health care component."
EBRI president Dallas Salisbury added: "If there is a silver lining, it's that Americans finally may be waking up to the realities of being able to afford retirement."
And there were some signs for optimism. The study showed that most Americans were at least trying to save for their later years.
Nearly three quarters said they had saved some money toward retirement, while two thirds were currently saving.
Another good sign was that the number of workers who had tried to calculate how much they need to save had risen, from 43 per cent in 2007 to 47 per cent this year, indicating fewer people were sticking their heads in the sand about retirement saving.
Worryingly, though, more than a fifth admitted to having no savings of any kind.
What's more, savings balances, in many cases, remained modest. Nearly half of the workers polled had set aside less than $25,000 for their retirement, while a quarter had $25,000 to $99,999, and 15 per cent $100,000 to $249,999. Just 12 per cent had $250,000 or more.
More than a fifth said they were worried about not having enough money to cover medical expenses in retirement, while more than a quarter expressed concern about long-term care costs.
Among retirees, 15 per cent were worried about medical expenses and 28 per cent about long-term care, it added.
