Americans' confidence in their future retirement lifestyle reached a four-year low according to Sun Life Financial's Unretirement Index.
Only 23% of those surveyed felt very confident they will be able to meet their basic living expenses in retirement. In the 2010 study, this number was 42%. Furthermore, one in five feel they will never be able to retire.
“This represents the most significant drop in retirement confidence we've seen in the four years we've compiled the Sun Life Unretirement Index,” said Wes Thompson, president, Sun Life Financial U.S. “Although the recession officially ended in 2009, average Americans feel that the downturn has not ended for them, which is substantially eroding their trust in their retirement future.”
The Unretirement Index for this year's survey fell 18% to 36, down from 44 one year prior. The Index is scored on a scale of 0 to 100, with 100 reflecting highest confidence about retirement.
It is a composite score based on five subject areas, which all revealed declines in confidence compared to last year. On a year-to-year basis, confidence dropped as follows in the following subject areas: employee benefits (-32%), the economy (-25%), government benefits (-22%), personal finances (-14%), and personal health (-13%).
Sun Life said on the positive side, at all wealth levels, respondents who expect to receive guaranteed lifetime income from annuities by age 67, or who own long-term care insurance products, feel significantly more confident about retirement.
Thompson called this "a positive wake-up call (that) Americans can take action to help secure their future and feel more secure about their golden years.”
