Expectations can be misleading

A general shift in the expected sources of income to fund retirement can be seen from current workers to current retirees. The general expectations of current workers for how they will fund their retirement are in direct contrast to how current retirees are funding their retirement based on responses to the Retirement Confidence Survey. The graph below shows that current workers expect 66% of their retirement income will need to come from their personal savings. Conversely, only 31% of a current retiree's retirement income is from personal savings. Current workers expect only 34% of their retirement income to be funded from a company pension plan and Social Security, whereas current retirees are receiving 69% of their retirement income from these plans.

The graph below shows that current workers expect 66% of their retirement income will need to come from their personal savings. Conversely, only 31% of a current retiree's retirement income is from personal savings. Current workers expect only 34% of their retirement income to be funded from a company pension plan and Social Security, whereas current retirees are receiving 69% of their retirement income from these plans.

Source: Employee Benefit Research Institute, 2002 Retirement Confidence Survey.

Don't come up short in retirement
Traditionally, Social Security and company pension plans were depended on to fund an individual's retirement. As fewer and fewer workers are covered by traditional pension plans and the retirement income gap grows larger, the current belief is that these established retirement income sources will no longer be sufficient to fund a comfortable retirement.