Few Slashing Retirement Savings as Economy Slowdown Continues

June 10, 2008 (PLANSPONSOR.com) - The latest data from the Principal Financial Well-Being Index indicate that a scant 3% of workers have cut back on retirement savings contributions in response to rising prices amid an economic slowdown.

A Principal news release said 47% ranked job security most important compared to 39% last year at the same time. Forty-one percent of workers ranked long-term financial future as second most important (down from 49%), followed by challenging work (12%).

Half of workers reported they are concerned about the future of their company, with 36% fearing their company will make job cuts and nine percent fearing the company could go out of business altogether. When it comes to their own personal job security, however, less than a quarter of workers (24%) are concerned about losing their job

As Americans continue to feel the pinch from rising consumer prices, more are pinching pennies when it comes to spending on everyday items. In the past two months, more than half of workers (56%) and retirees (55%) have cut back on spending due to challenging economic conditions, a dramatic increase from fourth-quarter 2007 (38% and 32%, respectively).

On another issue, workers indicated they will use their U.S. economic stimulus checks to pay down or pay off short-term debts (26%), save or invest (25%), and pay monthly bills (23%). Another 15% plan to pay down or pay off longer-term debts.

According to the survey, more than half of workers (58%) and retirees (69%) said they have an emergency fund they can immediately access. Most workers (61%), however, indicated they could only cover up to four months of living expenses with their fund.

The index, which surveys both American workers at growing businesses with 10 to 1,000 employees and retired Americans, is released each quarter by the Principal Financial Group and conducted by Harris Interactive.