The Washington D.C. group's
Retirement Confidence Survey
showed that some workers are putting their confidence in
employer benefits that are increasingly becoming
unavailable, with 41% of workers saying they or their
spouse now have a DB plan, but 62% of those respondents
saying they expect to get income from that plan in the
future.
According to the report, this means that 20% of
workers are counting on getting DB pensions from a future
employer - a reality that is becoming dimmer as employers
continue to shift in droves to DC plans. In fact, the
report shows that this has already begun to happen as
some workers (17%) admit to already seeing a reduction in
their benefits.
Workers are taking the following measures to make
sure they have enough for retirement:
-
32% say they are saving more, either on their
own (24%) or in an employer's plan (8%).
-
12% say they are trying to stay healthy;
-
5% plan to work during retirement
;
-
5% are making greater use of financial planning
or investment information;
-
4% plan to postpone retirement;
-
4% plan on seeking advice from a financial
professional; and
-
Almost four in 10 indicate they have done
nothing in response to the reduction in
benefits.
Some Reluctance to Act on Investment Advice
Even as defined contribution plans emerge as the
preferred employer-sponsored pension plan, the report
suggests that workers may not follow investment advice
when it's offered.
More than half of workers (54%) indicate they would
be likely to take advantage of professional investment
advice offered by companies that manage
employer-sponsored retirement plans; however, 66% of
these workers say they would probably implement only some
of the recommendations they receive and 11% think they
would implement none of them.
Nineteen percent of workers state they would
be
very likely to take advantage of investment advice if it
were available at a modest cost; 35% said they would be
somewhat
likely to take advantage of the service; and approximately
two in 10 each would be
not too
likely (21%) or not likely at all (22%) to use such
services.
Overconfidence in Health Care Coverage
Even though many employers are eliminating health
care coverage for future retirees, 41% of workers expect
to have access to employer-provided health insurance when
they retire.
The report found that
24% of workers and 35% of retirees report they have
long-term care insurance (separate from health insurance,
Medicare, and Medicaid) to help pay for care they might
need in a nursing home, assisted living facility, or at
home. Estimates of private
long-term care insurance policy use show that 10%
of Americans age 65 and older had private long-term care
insurance in 2002, suggesting that many are counting on
coverage they do not actually have, the report
said.