Prudential’s Fifth Annual Study of Employee Benefits found that saving for retirement has become much less of a concern since the recession; immediate financial needs must be taken care of first. Workers’ top five concerns in 2010 are having job security (86% rate as “highly important”), making ends meet (82%), having appropriate health insurance (78%), having retirement savings last as long as you need it to (72%), and maintaining a healthy lifestyle (69%). Needing to save for retirement came in ninth on the list of 15 concerns.
Prudential noted these results are starkly different from a pre-recession survey. In 2007, 76% of respondents said needing to save for retirement was “highly important.”
The survey also found finding a trusted source to provide financial advice has taken a hit since the recession – in 2007, 39% of respondents said this was highly important; in 2010, 29% said so.
Prudential found that those farthest from retirement place the least amount of importance on planning for it, even saying that for employees under age 35, it is virtually “off the radar.” Those 5-10 years from retirement, place the most importance on it, with 93% ranking “having your retirement savings last as long as needed” as highly important, and 77% ranking needing to save for retirement as highly important –higher percentages than for any of the other segments.
Prudential asserts that the employees with 11-20 years until retirement are the most promising to be open to advice for creating a financial plan, saying that “many express concern about financial security in retirement and, fortunately, they still have ample time to do something about it, such as establishing retirement savings goals and then implementing a plan to achieve them.”
Retirement expectations of employees are mixed. The average expected retirement age is 63.5 and has changed little in the past few years. Younger workers (under age 35), are the most likely to say they “don’t know” when they expect to retire. However, among those who do have a target age, their expectations may be unrealistic – 30% plan to retire between ages 55 and 60.
Baby boomer workers who are 55 or older are perhaps in the best position to know when they will be financially able to retire. Consequently, they are the most likely to say they expect to retire between ages 61 and 70, giving them more time to build up their savings and to receive full government benefits as well.
Generation X, which includes those between ages 35 and 44, are perhaps more pessimistic than other workers—21% say they don’t expect to retire from full-time active work until they are at least 70.
The Fifth Annual Study of Employee Benefits: Today & Beyond survey was conducted via the Internet during April and May of 2010. Plan participant results are based on surveys conducted among 1,200 U.S. workers, age 22 or older, who are employed full time for a company with at least 50 benefits-eligible employees.