The market meltdown and financial crisis of 2008 threw a huge monkey wrench into the retirement plans of the typical American, as home equity disappeared and hard-won stock market gains turned into losses in a single year's time.
Since then, though, the stock market has rebounded sharply, and recessionary conditions have given way to an economic recovery that has sent more people back to work. As a result, most workers are more confident than they've been in years about their prospects for retirement, according to the recent 2015 Retirement Confidence Survey from the Employee Benefits Research Institute.
Let's take a closer look at the EBRI survey to see exactly why Americans believe that times are continuing to look up for the labor force.
Workers worry, but retirees breathe a sigh of relief
Overall, retirement confidence among American workers has risen dramatically over the past year. Currently, 22% of those surveyed are very confident about their having enough money to live comfortably throughout retirement. That's the highest percentage since 2007, before the recession and financial crisis hit confidence. Nearly three of every five are either very or somewhat confident about their retirement prospects.
Still, many disgruntled workers don't think things are getting better. Nearly a quarter of those surveyed are still not at all confident about their retirement prospects, and that figure really hasn't shrunk from its worst levels over the past several years. Moreover, it's well above the 10% of pessimistic respondents from the 2007 survey.
Meanwhile, the numbers for those Americans who are currently retired show much more marked improvement. Seven in 10 retirees are either very or somewhat confident about having enough money to last their lifetimes, the highest proportion since 2007.
The value of having a plan
In order to gain confidence, it's important to have a plan for your retirement. The EBRI found that those who had an IRA, 401(k), or other retirement vehicle in place were more than twice as likely to feel at least somewhat confident about their long-term prospects. Similarly, those who had a solid financial plan that minimized any debt problems were more confident than those saddled with major debt.
Fortunately, more Americans are taking those steps to prepare for retirement. Nearly two-thirds of workers surveyed said they think they're doing a good job of doing the appropriate legwork in advance, and about three-quarters of retirees think they passed the test in preparing.
The situation isn't entirely resolved, though. About a third of workers responding to the survey said that they hadn't put any money aside for retirement. In particular, more than half of those who didn't have a retirement plan account said they have less than $1,000 in assets, which is a foreboding fact pointing to future trouble.
How to get on track
Retirement planning might sound like it's more complicated than you can manage, especially if you're still having trouble making ends meet. Yet there are a few very simple steps you can take to get your retirement back on track without making a huge dent in your pocketbook.
First, take a look at your employee benefits and see if you have access to a 401(k) or other workplace retirement plan. Dig into the details, paying close attention to whether you have an employer match. If your employer is willing to put money into your retirement account on your behalf, it's almost always worth taking it, so you'll want to get as close as you can to maxing out what your employer is matching.
Second, opening an IRA is also a good way to save for retirement, especially if you don't have a 401(k) or other plan at work. Look for financial institutions that have low-cost investments like exchange-traded funds or low-commission stock trading. With most brokers and other institutions accepting accounts with relatively small minimums -- especially if you can commit to regular monthly contributions -- you should be able to save for your own retirement effortlessly.
Finally, commit to boosting your savings over time. If you're fortunate enough to get a raise or a bonus in future years, don't just spend the extra money -- set it aside, or boost the percentage of your paycheck that goes to retirement. You'll hardly notice the hit, but your future self will thank you.
It's encouraging to see retirement prospects on the rise, but you still have to plan in order to make the most of improving conditions. By thinking ahead, you'll give yourself the most time to gain confidence in your own ability to retire as rich as you want.