The economy is strong and stocks are near record levels. But a long-running survey shows retirees’ confidence in having enough money to cover basic living expenses has dropped over the past year, due in part to concerns about medical expenses. Released Tuesday by the nonprofit Employee Benefit Research Institute, the survey shows that 80% of polled retirees are optimistic about their ability to afford basic expenses, down from 85% last year.
Driving the declines are concerns among retirees about rising medical and long-term care expenses and the uncertain finances of Social Security and Medicare. Those programs may be forced to cut benefits for future retirees due to their projected insolvency in coming decades.
Among the survey’s findings are that 44% of retirees said their health care expenses are higher than they had expected when they first retired. About one-quarter said the same about their long-term care costs. Among retirees, only 46% said they are very or somewhat confident their Medicare benefits won’t be cut, down from 52% last year. Close to the same percentages said the same about Social Security.
The survey indicates that about one-third of retirees are very optimistic about their financial futures, in line with last year’s figure. As in past years, retirees expressed more confidence than workers did in having enough for a comfortable retirement. This year, 64% of workers said they are somewhat or very confident in their retirement prospects. That is still lower than the 70% figure in 2007, before the recession. But it is up from 60% last year.
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