2009 Retirement Confidence Survey: Summary of Key Findings Employee Benefit Research Institute th Street NW, Suite 878 Washington, DC Phone: (202) Fax: (202) Mathew Greenwald & Associates, Inc Connecticut Ave. NW, Suite 620 Washington, DC Phone: (202) Fax: (202) Presented to ASEC, April 15, 2009 Mathew Greenwald Mathew Greenwald & Associates

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 2 Retirement Confidence Has Dropped to its Lowest Recorded Level Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years? (2009 Workers n=1,001)

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 3 The Decline in Retirement Confidence is Steeper Among Older Workers Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years? Percentage Very or Somewhat Confident

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 4 Workers with $25K to $150K Exhibit the Largest Decline in Retirement Confidence Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years? Percentage Very or Somewhat Confident

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 5 Those Who Have Done a Savings Calculation Lost More Retirement Confidence Than Those Who Did Not Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years? Percentage Very or Somewhat Confident

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 6 Confidence in Preparing Financially Has Declined Only Slightly How confident are you that you (and your spouse) are doing a good job of preparing financially for your retirement? (2009 Workers n=1,001)

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 7 Feelings of Financial Mastery and Belief in Equities as Long Term Investments Have Taken a Hit Please tell me how well each of the following statements describes you? (2009 Workers n=1,001) I think anyone can have a comfortable retirement, if they just plan and save. Over the long run, I believe stocks in general will be a very good investment. N/A

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 8 Interest in Financial Planning Has Declined as the Need Has Increased Please tell me how well each of the following statements describes you? (2009 Workers n=1,001) I think preparing for retirement takes too much time and effort. I enjoy financial planning N/A

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 9 Almost Three in Ten Think They Have Altered Their Target Retirement Date In the past 12 months, has the age at which you expect to retire changed? (2009 Workers n=1,001) If yes: Do you now expect to retire…? (2009 Workers who changed retirement age n=304)

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 10 The Poor Economy Heads the List of Reasons Why Workers Say They Are Postponing Retirement Why has your expected retirement age changed? (Among workers changing their retirement age, n=304) (Top mentions, multiple responses accepted) Poor economy36% Need to make up for losses in stock market28% Want to make sure have enough money24% Job loss, change in employment10% Cost of living higher than expected9% Uncertainty about stock market7% Need to pay bills/expenses/new purchases6%

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 11 Realistically, at what age do you expect to retire? (2009 Workers n=1,001) The Proportion of Workers Expecting to Retire After Age 65 is Growing More Slowly Recently Than Perceptions Indicate

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 12 Did you retire earlier than you planned, later than you planned, or about when you planned? (2009 Retirees n=256) Almost Half of Retirees Left the Workforce Before They Planned

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 13 Did you retire earlier than you planned because…? (2009 Retirees retiring earlier than planned n=121) (Percentage saying yes) People Retire Early for a Variety of Reasons, Many Beyond Their Control You could afford to retire earlier than planned There were changes at your company, such as downsizing or closure You had a health problem or disability You wanted to do something else You had to care for a spouse or another family member You had another work-related reason Changes in the skills required for your job (2007: obsolete) NA

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 14 More Workers Plan to Work for Pay in Retirement than Retirees Report Do you think you will do any work for pay after you retire? (2009 Workers n=1,001) Have you worked for pay since you retired? (2009 Retirees n=256) (Percentage saying yes)

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 15 Fewer Retirees Say They Worked Because They Enjoyed It Is the following a major reason, a minor reason, or not a reason why you worked for pay after you retired? (2009 Retirees who worked for pay n=100) Wanting to stay active and involved Enjoying working Wanting money to make ends meet Wanting money to buy extras

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 16 More Retirees Saw a Decrease in the Value of Their Savings/Investments Is the following a major reason, a minor reason, or not a reason why you worked for pay after you retired? (2009 Retirees who worked for pay n=100) A job opportunity A decrease in the value of your savings or investments Keeping health insurance or other benefits Trying a different career

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 17 Have you (or your spouse) tried to figure out how much money you will need to have saved by the time you retire so that you can live comfortably in retirement? (2009 Workers n=1,001) Less Than Half of Workers Report Doing a Retirement Needs Calculation

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 18 How did you (or your spouse) determine this amount? Did you…? (Workers who gave amount needed for retirement n=871) Guess Read or hear that is how much needed Fill out a worksheet or form Use an online calculator Do your own estimate Ask a financial advisor The Plurality Guess at How Much They Will Need

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 19 How much did you (or your spouse) calculate you would need to accumulate IN TOTAL by the time you retire? If haven’t calculated: How much do you think you (and your spouse) will need to accumulate IN TOTAL by the time you retire so that you can live comfortably in retirement? Many Think They Need Little in Savings to Live Comfortably in Retirement

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 20 Implications Reduction in confidence provides a better, but also more difficult, context for education –Key question: How to use this opportunity The decision of when to retire is critical –For many, staying in the workforce longer is a key to retirement security –The decision about when to claim Social Security has risen in importance

Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2009 Retirement Confidence Survey 21 Implications (continued) Need to focus attention on helping people understand how “much” sustainable lifestyle they can get from their current asset levels plus savings at current levels –This may lead to more effective retirement and perhaps savings decisions Need to focus attention on helping people understand the importance of having “sufficient” assets at the older ages and the penalty of running out of assets