The annual survey by Mercer HR Services found that plan participants are veering from the retirement savings path, with two-thirds admitting they are not saving enough for retirement, and nearly the same number saying they believe they have enough time to catch up on savings before they retire, according to a Mercer news release.
Some of the hurdles to saving for retirement cited by plan participants surveyed are competing financial needs that are more immediate such as paying off debt (38%), saving for unexpected expenses (34%) and funding children’s education (28%), the survey found.
The survey also looked at participants’ confidence in addressing various facets of retirement and found that a almost half (47%) of plan participants are not very confident or not confident at all in how they will care for their parents, and about the same number 48% said they were not very confident or confident at all in knowing how to calculate how much they will need for retirement.
According to the release, less than half of respondents (49%) said they are confident in being financially ready for retirement. Sixty-five percent said they do not know how they will cover health care expenses in retirement, while 68% of participants were little or not at all confident they know how much they will need for health care expenses in retirement.
As a result of their uncertainty, plan participants’ expectations for what their quality of life will be in retirement has lowered, with fewer than four in 10 expecting to live as well or better in retirement – a figure down from 52% in 2004. Similar declines in expectations were recorded for being able to travel in retirement, leaving a legacy or being able to help out family members financially.
An encouraging finding, the news release said, was that participants are turning less to friends and family and more to the company who administers their 401(k) plans and their employers for retirement savings advice. Fifty-six percent said they receive advice on 401(k) asset allocation from the investment company that runs their 401(k), while 23% said they receive such advice from friends and family.
The Mercer Workplace Survey is based on responses from 1,729 active 401(k) participants who are also currently enrolled in their employer’s health plan.