Confidence in these government programs is partly associated with how secure workers are in their own financial resources for retirement. Ninety-six percent of older workers who are confident of having adequate personal resources to live on comfortably five years into retirement are also somewhat or very confident they will receive their Medicare and Social Security dues. However, among those who are worried their own resources will not be sufficient, only 87 percent are confident of receiving their full Medicare benefits, and 85 percent are confident of receiving their full Social Security benefits.
Confidence falls farther along the horizon: Of those who are confident of having sufficient personal resources to last 20 years into retirement, 67 percent and 66 percent are also confident of receiving their promised Medicare and Social Security benefits respectively. Of those who worry their retirement resources won't stretch that far, these numbers fall to 44 percent and 41 percent respectively.
"People with less overall confidence in their retirement resources are likely to worry more about Social Security and Medicare because they cannot rely on personal savings. And these fears may be further exacerbated by the recent turmoil in financial markets," said Alan Glickstein, a senior retirement consultant at Watson Wyatt. "Yet, this anxiety is not based only on current market pressures: With an aging U.S. population, both systems are starting to pay out benefits to a rapidly growing older population while the pool of workers paying into each is growing much more slowly."
The Watson Wyatt analysis further showed that older workers' attitudes towards their promised Medicare and Social Security benefits differ by age, gender, education and income level:
- Workers at the lower end of the age range are less confident about their future benefits: Those 50-54 years old are much less confident of receiving their due than those aged 54-64, when it comes to both Social Security and Medicare.
- Women tend to be less confident than men about the government making good on its Medicare promises - roughly 64 percent of responding women had no confidence in the system compared with roughly 58 percent of men. The trend was similar for Social Security.
- Generally, workers with more education have more confidence in the system - roughly 78 percent of respondents with less than a high school education have little to no confidence in Medicare, compared with 64 percent of those with a college degree and 57 percent of those with a graduate degree. The trend was similar for Social Security.
- The effect of income and marital status was mixed - these factors seem to have less impact than age, gender and educational background on retiree confidence.
"Retirement income has traditionally been likened to a three-legged stool consisting of government plans, employer plans and personal savings," said Mark Warshawsky, director of retirement research at Watson Wyatt. "With the future of Medicare and Social Security uncertain, it is critical for employers and their employees to adequately prepare for future retirement needs."
