Poll: Americans Take Notice of Shift in Retirement Savings Responsibility

August 21, 2006 (PLANSPONSOR.com) - A recent poll found that about three-quarters of Americans prefer 401(k)-type plans over defined benefit plans, a nod to the idea that people may want to take on more of the responsibility for managing their money.

However, a large number of the 2,339 US adults polled by the Wall Street Journal say the government should step up its role in getting people ready for retirement.

The poll reveals that 88% say the government should take the reins in making sure people are ready for retirement.

One quarter of those polled said the government should increase tax breaks for people putting money into personal savings accounts as well; 22% said the government should increase Social Security payments; 15% said putting more government pressure on employers to match 401(k) contributions would help; and 15% said forcing employers to funnel more money into pension plans would offer some relief.

Those respondents aged 55 and older were most in favor of measures that would prompt the government to increase Social Security payments (29%) and tax breaks for those saving outside of work-related plans (29%), where respondents aged 18 to 34 were least likely to support either of these measures.

When divided among party lines, government intervention was a more popular solution among Democrats (92%) than Republicans (86%), with independents falling in line with Republicans at 86%.

The greatest divide between parties was over the question of whether the government should increase tax breaks for those putting money into personal savings accounts, with 16% of Democrats and 35% of Republicans saying so. Respondents from the two major parties were closest over a measure to require employers to better fund pension plans, which was one of the most heralded goals of the Pension Protection Act approved by Congress and signed by President Bush last week (See What’s Inside the Pension Protection Act ).

Divided among income levels, respondents with annual income of $75,000 or higher were much more likely to support tax breaks (37%) than those making less than $35,000 annually (14%). However, those that fell into the lower income brackets favored hiking Social Security payments.

Other results of the poll include:

  • 18-34-year-olds expect to be more reliant on personal savings upon retirement (49%), compared to 32% of those 35-44, 24% of 45-54-year-olds, and 27% of those 55 and older.
  • 79% of respondents would prefer an employer-sponsored DC plan, compared to 21% who preferred a DB plan.
  • 19% of those 18-34 expect to rely on Social Security money, compared to 35% of those 55 and older.