Putnam Investments: EBRI Retirement Confidence

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Putnam Retail Management

Findings from theEmployee Benefits Research Institute2011 Retirement Confidence Survey

Presented by Putnam Investments

April 2011

267717 4/11

© Copyright 2011, EBRI. Ruth Helman, Craig Copeland, and Jack VanDerhei, “The 2011 Retirement Confidence Survey: Confidence Drops to Record Lows, Reflecting ‘the New Normal’,” EBRI Issue Brief, no. 355 (Employee Benefit ResearchInstitute, March 2011).

Methodology: These findings are part of the 21st annual Retirement Confidence Survey (RCS), a survey that gauges the view sand attitudes of working-age and retired Americans regarding retirement, their preparations for retirement, their confidence with regard to various aspects of retirement, and related issues. The survey was conducted in January 2011 through 20-minute telephone interviews with 1,258 individuals (1,004 workers and 254 retirees) age 25 and older in the United States. Random digit dialing was used to obtain a representative cross section of the U.S. population. To further increase representation, a cell phone supplement was added to the sample. Starting with the 2001 wave of the RCS, all data are weighted by age, sex, and education to reflect the actual proportions in the adult population. Data for waves of the RCS conducted before 2001 have been weighted to allow for consistent comparisons; consequently, some data in the 2011 RCS may differ slightly with data published in previous waves of the RCS. Data presented in tables in this report may not total to 100 due to rounding and/or missing categories.

In theory, the weighted sample of 1,258 yields a statistical precision of plus or minus 3 percentage points (with 95 percent certainty) of what the results would be if all Americans age 25 and older were surveyed with complete accuracy. There are other possible sources of error in all surveys, however, that may be more serious than theoretical calculations of sampling error. These include refusals to be interviewed and other forms of non response, the effects of question wording and question order, and screening. While attempts are made to minimize these factors, it is impossible to quantify the errors that may result from them.

The RCS was co-sponsored by the Employee Benefit Research Institute (EBRI), a private, nonprofit, nonpartisan public policy research organization, and Mathew Greenwald & Associates, Inc., a Washington, DC based market research firm. The 2011 RCS data collection was funded by grants from more than two dozen public and private organizations, with staff time donated by EBRI and Greenwald. RCS materials and a list of underwriters may be accessed at the EBRI Web site: www.ebri.org/rcs/2011/

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Not representative of any Putnam fund or product. For information purposes only.Source: 2011 EBRI Retirement Confidence Survey.

Summary• Confidence levels among workers is back to its lowest point (13%)

– Highest loss of confidence among those who have saved less than $100,000

• Percentage of workers expecting income from Social Security in retirement

declined to 44%

• 75% of workers are planning to supplement their income in retirement by working

for pay

• Major reasons workers continue to work in retirement are:

– To stay active (60%)

– Because they enjoy working (59%)

• Percentage of workers who expect to delay their retirement declined to 20%, from

25% in 2009

• The poor economy is the major reason workers are postponing retirement (36%)

• 68% of workers report that they and/or their spouse have saved for retirement;

– A sizeable number of workers report they have virtually no savings or investments;

29% have saved less than $1,000

– 62% of workers think they could save more for retirement

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Confidence levels among workers isback to its lowest pointWorkers who say they are very confident about having enough money

for a comfortable retirement

13%

16%

13%

18%

27%

24%

36%

38%

41%

43%

43%

44%

23%

24%

24%

23%

20%

18%

27%

22%

22%

16%

10%

14%

2011

2010

2009

2008

2007

2006

Very confident Somewhat confident Not too confident Not at all confident

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Workers’ expected major sources of income in retirement

Percentage of workers expecting income from Social Security in retirement is declining

44%

33%

29%

29%

26%

24%

14%

Employer-sponsoredretirement savings plan

Social Security

Employment

Other personal savingsor investments

IRA

Employer-sponsored pensionor cash balance plan

Financial products that provideguaranteed income for life

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More workers are planning to supplement their income in retirement by working for pay

Workers who expect to work for pay in retirement

68%66%

67%66%

63%

72%70%

74%

2004 2005 2006 2007 2008 2009 2010 2011

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Among workers who will work for pay in retirement

Major reasons for working for pay in retirement

60%

59%

26%

26%

21%

17%

15%

6%

Want to stay active

Enjoy working

Want moneyto buy extras

Need money toMake ends meet

Keep health insuranceor other benefits

A job opportunity

Decrease in the valueof savings/investments

Try a different career

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Retirement expectations are delayed

Workers report they postponed their expected retirement age in the past 12 months

15%

18%

14%

25%24%

20%

2002 2005 2008 2009 2010 2011

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The poor economy is the major reason workers are postponing retirement

Reasons given by workers for postponing retirement

36%

16%

15%

13%

10%

Poor economy

Lack of faith in Social Securityor government

A change in employmentstatus

Inadequate finances orcannot afford to retire

Cost of living in retirementwill be higher than expected

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68% of workers report that they and/or their spouse have saved for retirement

Many workers say they and/or their spouse have saved money for retirement

68%69%

75%72%

66%

70%69%68%

20112010200920082007200620052004

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… but a sizeable percentage of workers report they have no savings or investmentsTotal savings and investments reported by workers

(not including value of primary residence or defined benefit plans)

29%

27%

20%

17%

16%

19%

10%

11%

13%

11%

12%

11%

9%

11%

12%

14%

11%

12%

10%

11%

12%

2011

2010

2009

<$1,000 $1,000-$9,999 $10,000-$24,999 $25,000-$49,999 $50,000-$99,999 $100,000-$249,999 >$250,000

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Many workers think they could save more for retirement

Workers who think it is reasonably possible to save $25 a week for retirement

62%

66%68%68%

59%

64%66%

68%

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Economy & Finance

Putnam Investments: EBRI Retirement Confidence