A news release said that the American Express Retirement Services poll found that four in 10 workers responding this year signaled a pending savings cutback – slightly more than the 38% who took that posture last year. Of those surveyed, 31% (up from 29% in 2003) said that a significant increase in their health-care costs would make them specifically consider reducing their regular retirement plan contributions, with 25% saying they definitely make that move. In such cases, 53% of workers would make a modest 1% to 2% reduction, while only 14% would cut back 3% to 4%. The number of those willing to make a 5% or more cutback reached 34% in 2004 – up dramatically from 25% in 2003.
Nearly six in 10 (59%) workers said they already cut their investments and reduced discretionary savings between 2003 and 2004 – up slightly from the 56% in 2003.
The majority (74%) of workers said they had at least some concern about how rising health-care costs could affect their ability to fund their retirement and other financial goals, with one in five pronouncing themselves “very concerned.”
A significant percentage of respondents in 2004 also reported that they would now consider switching to a less expensive health-care plan (37% in 2004 versus 29% in 2003). (Not surprisingly, awareness of their health-care benefit cost increases was nearly universal among respondents (92%), with 70% of survey respondents reporting an increase in the share of expenses they pay for their health care.)
“What we’re seeing is employees weighing their long-term retirement security against the near-term cost increases for current healthcare coverage,” said Kellie Richter, vice president, American Express Financial Education and Planning Services, in a news release. “As the survey results show, this becomes a bit more difficult each year-with no relief in sight for American workers.”
Overall, health-care expense increases were again shown to have a measurable affect on their level of financial stress, with half of those surveyed in 2004 indicating at least some or considerable increase in financial stress, identical to 2003.
In order to cope with the affects of these financial burdens, the survey found 65% of workers would be interested in attending a workplace financial seminar to help them understand and address rising health-care costs, down slightly from 2003, but still a strong majority.
New to the survey in 2004, when asked what most concerned them, affording health care today or health care in retirement, 75% of those surveyed said affording health care coverage during their retirement years.