The Fourth Quarter 2002 Principal Financial Well-Being Index found that nearly half (46%) of employee respondents older than 55 had shifted to more stable investments, while less than a third of those in other age groups had.   A quarter ago, only one in five had made such a shift, according to the Principal index (see  Healthcare Concerns Weigh on Well-Being Index ).

Too Many Choices?

Among the 66% who did not make changes to how their assets were allocated, most (58%) reflected a belief in long term investing. However, nearly one in five (19%) cited immobility due to “too many options and I don’t know which one to choose.”   Thirteen percent said they were following the recommendation of a financial planner or advisor, 8% said they didn’t have enough time to make changes, and 2% actually said they weren’t interested in how their retirement savings were invested.   Only 21% said they had not yet planned for retirement, down from 28% a quarter ago.

Looking ahead to retirement, most (80%) were concerned about staying healthy and self-sufficient.   Female respondents were more likely than men to be worried about having to work in order to make ends meet (71% to 59%), more worried about outliving their savings (58% to 51%), and paying for a catastrophic illness (57% to 50%).   Men were more worried about staying busy (28% to 22%).

Here and Now

As for the “here and now”, healthcare remained the benefit most prized by workers, noted as “very important” by 91% of respondents.   Defined contribution plans were next most highly rated, but by just 74% (72% of men ranked it very important, compared with just 63% of women), with other benefits ranked as follows:

• Defined benefit plans (61%)
• Disability insurance (61%)
• Life insurance (56%)
• Profit-sharing/bonus (46%)
• Stock options (18%)

Workers surveyed were much more focused on job security, a concern of 57%, compared with 47% a quarter earlier.   Long-term financial future faded in importance, and was cited by just 29% compared with 34% in the third quarter, while challenging work was cited by just 14%, compared with 19% in the last survey.   A year ago job security was a priority for 46%, while long-term financial future was an issue for 40%.

Workers were somewhat more certain that their employer was concerned about their long-term financial future.   Twenty-seven percent agreed that their employer was concerned, compared with just 22% a quarter earlier.   However, a significant 46% disagreed with that perspective, largely unchanged from the 50% that said so in the third quarter.

The fourth quarter survey was conducted online among a national sample of 1,654 employees of growing businesses (10 to 1,000 employees), weighted to reflect that population, during November 2002 by Harris Interactive.