Employees Behind In Saving For Retirement, College

December 30, 2002 (PLANSPONSOR.com) - Seventy-nine percent of employees surveyed expressed concern about outliving their retirement savings, while 76% are worried about the need to work through retirement, according to the latest release of the MetLife Employee Benefits Trend Study.

Employees surveyed age 41-50 are the most worried about outliving their retirement savings, with 83% of employees in this age bracket expressing strong concern. Women are somewhat more concerned than men, with 84% of females characterizing themselves as very worried versus 74% of men.

The survey found the majority (67%) are either behind or have not started saving yet for their retirement.   While a fifth have done no retirement planning, 25% have had formal discussions about their retirement with a financial planner and 18% have completed a financial plan.

Broken down by age bracket, the survey found those employees closest to retirement (age 31-50) are the ones feeling the least prepared.   Of those, 68% age 31-40 say they have not yet started saving for retirement, with 71% age 31-50 reporting the same and 66% over the age of 51 similarly unprepared.  

Additionally, 22% of those over the age of 50 have “done no retirement planning,” compared with 20% of employees age 41-50 and 25% of employees age 21-30.

Both employers and employees recognize the seriousness of this retirement shortfall. This year, 28% of employers list “providing retirement education/planning” as the second most important employee benefits strategy behind “work/life balance.”

Education Too

Similar patterns were reported by employees with children.   Of this group, 55% report being significantly behind in their education savings goals, with 28% having not saving at all.

Only 23% of employees surveyed are on track for achieving, or have achieved, their savings goals.

The survey found the most popular savings vehicles for education to be:

  • 20% – mutual funds
  • 19% – 401(k) or 403(b) plans
  • 17% – CDs/Money Market Accounts
  • 16% 529 Plans

The MetLife Employee Benefits Trend Study was conducted during the third quarter of 2002.   The survey polled 605 HR/Benefits executives and 1,038 active full-time employees from companies with at least 50 employees.