A MetLife news release said that its Employee Benefits Trend Study found that workers between the ages of 21 and 30 are the most unprepared, with nearly half (40%) lacking retirement goals and/or savings. GenXers between 31 and 40 are also significantly behind the savings curve, with nearly one-quarter (23%) admitting that they haven’t started to save, and an additional 8% saying they have no retirement savings goals.
“Many young workers mistakenly believe that they can make up for a savings shortfall today at some yet-to-be-determined point in the future,” said Howard Kurpit, vice president, MetLife Retirement & Savings, in the news release. “As a result, they forgo the benefit of a long investment period and overlook the possibility that they will be downsized, disabled or self-employed at some point in their career. For most employees, even small contributions to a 401(k) during the early years can make a major difference in the size of the nest egg upon retirement.”
Among all age groups, survey results show that the majority of full-time US workers (64%) are either behind in their retirement savings goals, or haven’t yet started saving. Particularly likely to be behind in retirement savings are women, a quarter of whom haven’t yet started to save for retirement (compared with 15% of men). Some 26% of widows have no retirement savings goals and 70% say they live “paycheck to paycheck.”
Outliving Retirement Savings
Nearly half (49%) of full-time employees surveyed said they were most worried about outliving their retirement money — with women (55%) being more concerned than men (44%). However, nearly as many respondents (45%) have not factored their longevity into their retirement savings plans. For instance, most (59%) younger workers age 21 to 30 anticipate needing at least 20 years of income post-retirement, yet 66% plan to retire before the age of 60.
Younger workers age 21 to 30 are less apt to save in general – only 6% own annuities (versus 11% of employees overall) and 62% participate in a 401(k) or other retirement plan (versus 70% of employees overall). Yet, nearly half (46%) are interested in having their employers provide them with access to financial planners.
The survey found that middle-age workers age 41 to 50 tend to have 401(k)s or other retirement plans more often than their counterparts (75% versus 70% of employees overall). Interest in annuities rises with age — 14% of 41- to 50-year-olds own one, whereas 18% of 51- to 60-year-olds and 27% of 61- to 69-year-olds own the investment vehicles.
Married respondents are more likely to have a 401(k) plan (73%) or an annuity (11%) than single respondents (67% and 9%, respectively) or those in domestic partnerships (60% and 9%, respectively). Respondents with children under the age of 18 were less likely to own a 401(k) plan (66%) or annuity (10%) than those without (72% and 11%, respectively).
The MetLife Employee Benefits Trend Study was conducted during the third quarter of 2004 and consisted of two distinct surveys. The employee survey, fielded by NOP World, polled 903 full-time employees, age 21 and older, at companies with at least two employees, and 1,542 voting-age consumers. The employer survey was conducted by TNS NFO and polled 1,528 HR/Benefits executives.