American workers are more pessimistic about their retirement outlook than at any other time in the last two decades, the Employee Benefit Research Institute reported on Tuesday.
In its annual Retirement Confidence Survey, it found that worker expectations for their later years withered in the face of high unemployment, government budget problems, rising health care costs, lower investment returns and other factors.
But the study's authors saw a silver lining in the findings because it suggests workers are finally facing up to the harsh realities of retirement, circa 2011.
These are positive findings, said EBRI research director Jack VanDerhei, a co-author of the study.
People's expectations need to come closer to reality so they will save more and delay retirement until it is financially feasible, he said.
The study, conducted annually by EBRI and consulting firm Matthew Greenwald & Associates, is funded primarily by financial firms that sell products and services related to retirement investing. And it is not exhaustive - for example, it asks workers about their savings' levels but doesn't include home equity or defined benefit pensions, two big categories that are likely to boost the retirement lifestyles of at least some respondents.
The downbeat responses were the worst recorded since the survey began 21 years ago.
The timing of the survey includes the effect of the recession, the housing market decline and other issues that have profoundly affected workers' behavior and retirement plans. But the survey also revealed some inconsistencies between workers' expectations and the actual retirement experiences of those who have already left the work force.
Here are some key findings:
* Fearful workers. More than a quarter of respondents - 27 percent - say they are not at all confident about having enough money in retirement. That was the highest percentage since the survey began 21 years ago. Conversely, the lowest percentage ever -- 13 percent -- said they were very confident.
* Confident retirees. Those who are already retired don't share the gloomy outlook of pre-retirees. Roughly 60 percent of those already retired said they felt at least somewhat confident that they had enough money to live comfortable through the rest of their lives.
* 'Working longer' may not work. Roughly one in five workers said they intend to work longer than they had originally planned, mainly because of the poor economy. But at the same time, almost half of current retirees - 45 percent - said they were forced to retire earlier than they had planned, either because of health problems or because they were laid off.
* Low savings. More than half of workers (56 percent) said they had less than $25,000 in savings and investments, not counting their homes or defined pension plans. And almost three in ten of those who claim to have retirement savings - 29 percent - said they had less than 1,000. Even though that figure might be skewed by age - the younger workers are, the lower their savings tend to be -- EBRI reported that 20 percent of those over the age of 55 said they had less than $10,000 saved for retirement.
(Reporting by Linda Stern; Editing by Richard Satran)