According to the survey sponsored by Prudential Retirement, 85% said they fretted about whether Social Security benefits would be enough for them to live a comfortable retirement and that those worries propelled them into their workplace plan.
Nearly seven in 10 (69%) said they supported the controversial suggestion to privatize all or part of social security and allow at least some Americans to invest Social Security dollars on their own, the survey found.
Given many Americans’ fears about Social Security, it is not surprising that six in 10 respondents expect to get most of their retirement income from a workplace retirement savings plan. While just under half (46%) believe they have a good handle on how much they will need, they admit not having come to that figure via a formal numbers crunching. Meanwhile, 54% are setting aside the biggest chunk they can – but not necessarily as much as they should to reach their retirement goals.
Many respondents may be worried about aspects of their financial future, but that apparently hasn’t propelled them into action in managing their retirement savings. According to the survey, fewer than a third have set formal retirement savings goals, more than half have their assets in four investment options or fewer and almost 70% didn’t change their investment allocation in the past year, despite the often turbulent down markets.
The Prudential survey followed numerous other polls in revealing the power of an employer match in influencing how much participants defer into their retirement account. Of those who had an employer match, a third were saving the program maximum while 36% deferred just enough to get the full match. Of those in programs without a match, more than three quarters (77%), would up their savings amount if their employer instituted a match.
Add onto the large numbers of nearly inactive participants the fact that many are also less than confident about their investing abilities to be able to generate enough cash to live on when they stop working.
The survey found that 75% believe professional investing advice is more important than it has been with 60% asserting that their employers should help bring them the needed guidance. The respondents said they didn’t want just garden-variety advice. They were seeking advice that was specifically tailored to their circumstances – age, salary, asset allocation and willingness to take on risk. If they got the targeted communications they were seeking, respondents said, they would be willing to take the appropriate action with their retirement account.
Finally, a near unanimous verdict from respondents was that the rising cost of medical care and prescription drugs was, by far, the key financial issue standing between them and a comfortable retirement. Nursing home care cost is another major concern, according to the survey. The survey covered 1,064 respondents between 21 and 64 years old.
For more information, go to http://www.prudential.com/index/ .