Economy, Health Spending are Pressuring Retirement Savings

A Watson Wyatt news release said more workers acknowledged this year their difficulty paying for basic needs (15% in 2008 versus 10% last year), depleted personal savings (11% in 2008 compared to 6% in 2007), or need to borrow money (10% in 2008 compared to 5% in 2007).

Economic pressures are also apparently forcing some U.S. workers to cut their medical care spending. A significantly lower number of employees (19%) are willing to pay higher premiums to keep deductibles and copays lower and more predictable versus 38% last year.

In addition, 66% of employees are taking steps to improve personal care, up 4% from 2007, according to the poll of 2,487 employees of large U.S. companies conducted in May and June 2008.

“Workers will continue to look for avenues to save money in tight times,” said Cathy Tripp, national leader of consumerism at Watson Wyatt, in the news release. “In the current financial climate, employers stand to gain from reinforcing messages on preventive care, wellness resources and the importance of following prescribed drug regimens. There are a number of behaviors that, if embraced today, will lead to substantial health cost savings in the long term.”

At the same time, however, some workers are taking actions that could lead to higher costs in the future, Watson Wyatt said. For instance, the survey found that 17% avoided a recommended doctor’s visit this year to save costs. Similarly, 17% did not fill a prescription or skipped doses of prescribed medicine, an increase from 13% in 2007.

Nearly half (46%) of employees choose lower-cost drug options, and 40% go to the doctor only for serious conditions – both up from last year. While a relatively low number of employees are seeking more affordable treatment options (14%), looking for inexpensive care providers (8%), or negotiating lower prices with their doctor (2%), each cost-saving measure is trending up from 2007.

The report is available at www.watsonwyatt.com/employeeperspectives .

Steps employees are taking to reduce spending on medical care

Source: Watson Wyatt

Note: Some questions were new in 2008.