The 2011 Higher Education Retirement Confidence Survey found 25% of higher education employees are very confident in their retirement income prospects and 50% are somewhat confident, compared with 13% and 36%, respectively, for U.S. workers.
According to the survey report, greater overall retirement confidence in the higher education workforce is consistent with their greater likelihood of saving and determining how much savings is needed. Eighty-eight percent are currently saving for retirement. Of these, 60% have tried to determine how much they need to save by the time they retire.
Healthcare expenses are the biggest retirement financial concern among college and university employees—28% are not confident that they will have the financial resources to cover medical care. Debt clearly hinders retirement preparations—86% of those with a major debt problem consider themselves behind in their planning and saving for retirement compared with 33% of those without a debt problem.
The survey found most higher education employees who have saved for retirement are focused on accumulating a certain amount of money (57%) as opposed to generating a certain level of retirement income (32%). Thirty-four percent of those who have saved are very confident that they will choose the best way to draw income from their savings during retirement, but only 21% are very confident that they will not outlive their savings.
Thirty-eight percent think that they will annuitize some or all of their savings to help cover living expenses in retirement; 44% do not think that they will annuitize any assets and 17% are unsure.
Sixty-five percent of the higher education workforce has received retirement planning advice from a professional financial adviser within the past three years, with those ages 55 to 64 the most likely to have received advice. Advice regarding asset allocation was the advice most typically received (83%), followed by advice on how much to save (66%) and the timing of retirement (58%).
Advice on drawing retirement income from savings and paying for health care expenses in retirement was more common for older individuals. Two-thirds of those ages 65 and older who received advice covered how to draw income from savings during retirement, and 37% of those age 55 and older covered paying for retiree medical expenses.The full survey report is at http://www.tiaa-crefinstitute.org/pdf/research/trends_issues/ti_higheredRCS0611_02.pdf.