While retirees remain more confident than workers, with a third(32%) very confident and another 44% somewhat confident that theywill have enough money to live comfortably throughout retirement,retirees are less likely than in 2017 to feel confident in theirability to handle basic expenses in retirement as well as medicalexpenses, according to the just-released 2018 Retirement ConfidenceSurvey.

The 28th annual survey, conducted by the Employee BenefitResearch Institute and the independent research firm Greenwald& Associates, measured worker and retiree confidence aboutretirement.

The 2018 survey of 2,042 Americans was conducted online Jan. 3through Jan. 16. All respondents were 25 or older, and the surveypolled 1,002 workers and 1,040 retirees.

The share of workers who feel very confident in their ability tolive comfortably in retirement remains low at just 17%, but another47% are somewhat confident, the survey found. Combining those thatare very and somewhat confident, workers appear to be moreconfident in retirement than they were in 2017.

Retiree Confidence Slides

Retirees' overall confidence is declining, but confidence inbeing able to afford medical and long-term care expenses inretirement is down significantly. Also, retirees' confidence thatSocial Security and Medicare will continue to provide benefitsequal to what retirees receive today has decreased.

More than four in 10 retirees report that their health careexpenses in retirement are higher than they expected, and anotherone in four say long-term care costs have been higher.

Other factors not measured in the survey may also be dampeningretiree optimism, such as low interest rates. As in the past, twoout of three retirees reported that they aim to maintain orcontinue to grow their asset level in retirement. That said, theseretirees report the value of their assets is largely what theywould expect.

Workers With 401(k) Plan More Confident

Workers' “very positive” attitude about their workplace definedcontribution plans is likely impacting their overall retirementconfidence. The survey found that 76% of workers with a DC plan areconfident in having enough for a comfortable retirement versus 46%without such a plan.

More than four in five workers with a DC plan report being “veryor somewhat” satisfied with the plan overall, and with theinvestment options available to them.

Workers will “depend heavily” on income from DC plan assets,with 8 in 10 saying DC plans will be a major or minor source ofincome in retirement, compared with just 50% of retirees. Six in 10workers also expect income in retirement from an IRA, but this isdown from 2017 when nearly two-thirds expected income from anIRA.

Mixed Confidence on Generating RetirementIncome

Only half of workers are confident that they know how muchincome they will need each month in retirement or how to withdrawincome from their savings and investments, with only one in eightvery confident, the survey found.

Yet two in three retirees report that converting their assetsinto income is a relatively easy task for them. Asked about theirwithdrawal strategies from DC plans or IRAs, many retirees aren'twithdrawing a lot from these tax-advantaged plans, with 4 in 10withdrawing the legally required minimum.

Retirees receive income from predictable, guaranteed sources,with the survey noting that two in three retirees report SocialSecurity is a major source of income, while only about a third ofworkers believe Social Security will be a major source.

More than 4 in 10 retirees report income from a defined benefitplan is a major source of income, while only 32% of workers expecta DB plan to be a main supply of funds to tap in retirement.

Health Care in Retirement

Just one in five workers and four in 10 retirees say they havecalculated how much money they will need to cover health expensesin retirement.

Retirees who calculated how much they would need for health careare more likely to say health expenses in retirement have been asexpected.

Among workers employed full or part time, women (76% vs. 68% ofmen), those who have saved for retirement (74% vs. 64% who havenot) and those who have any type of a retirement savings plan (75%vs. 58%) are more likely to say planning for health care expensesin retirement would be helpful if their workplace offered it.