In the latest report from the 13th annual Retirement Confidence Survey (RCS) released in early April by the American Savings Education Council, Americans' overall confidence in their ability to retire comfortably still seems fairly optimistic.

Retirement anxieties are growing, however, with only 21 percent of all those surveyed saying that they have enough money to live comfortably when they are retired.

A far more significant number are less confident saying they will postpone retiring due to financial or economic returns, and will continue to work. The remaining group in the survey admit they are drifting with the tide and just totally unsure of what they need to do.

The Retirement Confidence Survey is a comprehensive study of the attitudes and behaviours of American workers and retirees of all aspects of saving, retirement planning, and long-term financial security.

First released in 1991, the RSC contains a core set of questions that is asked annually, allowing for key attitudes and behaviour patterns to be tracked over time. It is quite unique in its long-term ability to track public attitudes about saving and retirement.

Yes, I know; there she goes again, on the band wagon espousing savings. This study has real significance, however, for future retirees, for employers who may be solicited to hire them, and for tourist/retirement canters/censers who rely upon the largesse of `the grand life of leisure' crowd.

Key findings from the 2003 survey are:

Plunging stock market takes it toll on investor confidence levels. No secret there.

Baby boomers are postponing retirement due to stock market losses and the realisation that the cost of living is higher than they expected. They all knew this, but their portfolio losses (both real and on paper) have made them feel considerably poorer.

People are saving blindly: 61percent of workers have not figured out what they will need when they do retire. Those who have done a retirement calculation do not remember how much they will really need by the time they do retire. It is true that tough choices in life are hard to cope with.

More time is spent on fun than finances. Yes, the ostrich syndrome is alive and well, the mantra being `if we ignore it the problem will go away'. 74 percent said they spent more time planning for the holidays, vacations, and social events than planning for significant future lifestyle changes.

Health insurance costs have not been factored into the cost of retirement. 79 percent of those surveyed have given little or no thought to the overall cost of general health insurance coverage or long-term health care issues.

None of these statements are news. You have heard them all before, even the discourse about the perpetual aversion of most consumers to either think, or refuse to think, about the future. Even though we know better, we prefer to make the assumption that we will blissfully live forever in perfect health.

The RSC summarised their findings in this succinct statement: "Seventy percent of workers surveyed say they plan to work after retirement, but only 25 percent have actually gotten jobs.

It seems clear that postretirement employment will go up, but a changing economy, changing employer needs, declining health, and other factors may prevent many who plan to work in retirement from actually doing so."

So, how is the average consumer going to pay for retirement? Financial experts say that you should plan on needing 70 - 80 percent of your current annual living expenses in retirement.

What is not often factored into that estimate is the cost of health insurance for older citizens, particularly when you consider that they can not benefit from the health insurance benefit pool. Today, as renewal premiums come due, there are reports of health insurance premiums more than doubling in one year. Worse yet, there may be 65 year old individuals soon-to-be-retired who cannot obtain health insurance at any cost.

Last year I wrote an article for a Bermudian periodical on the escalating cost of health insurance on a global basis. In a quantifiable projection model of retirement costs, annual health insurance inflation factors of 12, 16 or 20 percent were conservatively assumed, and even then, the credibility of those numbers raised a few eyebrows when discussed.

Today, the assumptions are made for a bare bones retirement living cost of $40,000 and health insurance for a single person of $9,600 per year. When placed on a trajectory at a 20 percent inflation rate, escalating health costs surpass the cost of living in eleven years. See chart display. This data can be easily imputed into our local economy. Whether you like or dislike Americans, Bermuda is a microcosm of a small American town. And we are facing many of the same issues; ever increasing cost of living, a concentrated industry base, extremely expensive transportation costs, an increasing elderly population, and many soon-to-be retirees realising that they have nowhere near enough savings for retirement.

Some may never be able to fully retire. The reality of older workers staying on the job in order to assure a quality lifestyle change is here, now. The good news is that the collective intellectual capital of a senior workforce should continue to be in demand for years to come as the major industrialised countries simply do not have enough experienced younger workers to fill our shoes.

The question remains though, will older workers be allowed to continue employment after the perceived mandatory retirement age, and will they be eligible for health coverage in the employer benefit pool?

For a good website on motivation on planning for long term personal financial independence go to www.choosetosave.org

Martha Harris Myron CPA CFPr is a Bermudian, a Certified Financial PlannerT (US license) practitioner and VP, Personal Financial Services at Bank of Bermuda. She holds a NASD Series 7 license, and formerly owned a US financial services practice meeting the needs of 400 individual and corporate clients.

Confidential E-mail can be sent to:

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The article expresses the opinion of the author alone, and not necessarily that of Bank of Bermuda. Under no circumstances is this advice to be taken as a recommendation to buy or sell investment products or as a promotion for financial plans. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.