Survey: More believe they will have to delay retirement

By David Pitt, AP Personal Finance Writer

DES MOINES — The slow climb out of recession has U.S. workers worried about their ability to recover financially.

More than 80% of workers in a national survey released Tuesday by Sun Life Financial (SLF) believe they will need at least three years to rebuild their retirement savings. That's a dramatic increase over the 64% who said the same in a year ago.

Some 20% of workers believe they will never get their savings back to pre-recession levels, the survey says.

The Unretirement index was created in 2008 as the financial crisis deepened. The survey focuses on how workers are reacting to economic conditions and how their behavior and retirement plans are changing.

"Even though the headline news is that we're through the recession, the average person doesn't really see it and in fact they are still feeling it," said Wes Thompson, U.S. president of Sun Life Financial. "They were assuming things would have gotten better by now, and it has not from their point of view."

Indeed more workers are saying the economic crisis will delay their retirement by a year or more. This year 64% of workers reported delayed plans. That's up from 54% in 2008.

More than half of workers responding — 52% — expect to work at least three years longer than originally planned.

Delayed retirement, along with the belief that Social Security and Medicare will not be there when they retire, has soured workers on government and policymakers.

The number of workers who are confident they will receive retirement benefits at a level comparable with today's retirees reached a new low for Social Security, Medicare, and medical benefits from an employer.

The results show:

— 14% of respondents are very confident in Social Security, down from 22%;

— 16% are very confident in Medicare, down from 20%; and

— 22% are very confident in receiving medical benefits from an employer, down from 25%.

While workers in France are striking in protest of President Nicolas Sarkozy's plans to increase the retirement age to 62 from 60, workers in the United States have resigned themselves to working at age 67 and beyond.

Nearly half of today's workers believe they will still be working at age 67 and one quarter believe they'll be working full time at that age, up from 19% who thought so in 2008.

The survey shows workers also worried about their quality of life.

Less than half of respondents — 42% — are very confident they will be able to take care of basic living expenses in retirement. Only one in four have strong confidence that they will be able to take care of medical expenses.

So, what are people doing? They're hunkering down by cutting spending, with 71% saying they're reducing spending and 66% reducing debt.

The most common places to cut spending were on entertainment, restaurants, holiday shopping and delaying the purchase of a car or a home improvement.

For the survey, telephone interviews were conducted in September with 1,201 randomly selected people who said they worked full or part time. The statistical margin of error is plus or minus 2.8 percentage points.

http://www.usatoday.com/money/perfi/ret ... rvey_N.htm