Eighty-nine percent of workers at growing companies (10 to 1,000 employees) are aware that Social Security change is being discussed, but 49% said that they would not be comfortable managing their own personal accounts, which would be created under the current Bush proposal.
They are, at least, realistic about what Social Security will do for them, according to the report. Seventy-seven percent of employees expect 50% or less of their retirement income to come from the program, which Principal claims is about right. Looking at different age groups, most seem to understand that the younger one is, the less likely Social Security income will be to make up a substantial portion of their retirement income; 65% of those between 18 and 34 think that the program will provide 25% or less. Older workers are more likely to believe that Social Security will provide a larger portion of their retirement pie.
“These findings are a healthy sign that the message is finally getting through to American workers that Social Security was never meant to be the sole source of retirement funding, rather a supplement to personal savings and employer-sponsored benefits,” said Larry Zimpleman, president of Principal Retirement & Investor Services, in a press release.
Along with their realization that Social Security won’t be their retirement pillar, many employees (49%) are extremely or very concerned about the future of the program; 24% percent are somewhat concerned. Thirty-six percent say they will work longer, while 32% plan to phase in retirement. Younger workers, according to the study, have expressed an interest in saving earlier in their careers to be ready for retirement.
Along with these concerns, long-term financial worries seem to plague workers. Sixty percent cite it as their top concern, with 31% claiming that they are worried about covering day-to-day expenses.
Surprisingly, workers are showing an increased satisfaction with benefits from the workplace, even while employers cut back. According to the study, the number of employees getting coverage for health insurance, life insurance, and disability insurance, as well as defined contribution plans is decreasing; however, satisfaction continues to grow. Satisfaction levels for both profit sharing (55%) and defined benefit (52%) both top 50%, while life insurance, health insurance, and defined contribution plan satisfaction all top 40%. Health insurance is the most important benefit to employees, according to the study, followed by defined benefit or defned contribution plans.
The survey – Principal Financial Well-Being Index – is released semi-annually, and was conducted by Harris Interactive.