Anxiety Among Public Sector Workers Is Growing

New research from MissionSquare Research Institute looks into the role that employer-sponsored retirement benefits, retirement readiness, worsening economic conditions and other factors are playing in reducing workers’ anxiety by helping them achieve financial security.

According to the report, “Inflation, Market Volatility, and Retirement: How Employer Benefits Can Help Public Sector Worker Anxiety Over Current Economy,” 84% of public service employees say they are anxious about the impact of economic conditions and market volatility on their personal financial security.

Current economic conditions and market volatility prompted 81% of respondents to say that they feel worried about whether they will have enough money to live comfortably in retirement, while they will have enough money to last them throughout retirement, 70% said they were worried about having enough in emergency savings right now, while 72% said they worried about being able to retire on time

Nearly half of state and local public service workers are currently saving less than usual for retirement due to high inflation rates over the past year. Of that group, more than one-third said that housing costs (e.g., rent, mortgage payments,) have led to saving less than usual for their retirement, the report says. indicate that high inflation (48%) and rising housing costs (37%) are triggering lower retirement savings. 

While a large majority of all workers report reducing or not changing their savings rates, given housing expenses, non-white respondents were more than twice as likely as their white peers to report that more than usual for retirement due to current housing costs, the report adds.

For the majority of public sector workers, both employer retirement and non-retirement benefits (e.g., health insurance, other insurance benefits, PTO/leave, non-traditional benefits) and other factors make employees more inclined to stay in their job, the report says. Among public employees, 42% believe their employers retirement benefits are better than those offered in the private sector, 11% believe they are worse, and 35% believe they are about the same.

According to the report, the top three actions employers could take to bolster retirement readiness include providing higher wages/salary (86%), better retirement benefits like employer matches (54%) and better healthcare benefits in retirement (48%).

These findings are based upon a national survey of 1,003 state and local government workers conducted by Greenwald Research on behalf of MissionSquare Research Institute in September. The survey polled respondents about financial and retirement security amid current economic conditions.