According to the company’s 9th annual Employee Benefits Trends Study, four out of ten employees have changed their predicted retirement date since last year, and 30% raised their expected retirement age. Furthermore, this trepidation about hitting retirement goals could be accelerating – 59% of workers in the study expect to work beyond age 65, compared with 52% one year ago.
Given these indistinct targets, many employees lack confidence in their ability to prepare for the culmination of their working years, with only 39% feeling assured about managing the funds in their employer-sponsored retirement plan, according to a press release. Over half (54%) of workers have not calculated how much annual household income they will need in their retirement. Of those that have not done calculations, 29% don’t understand how to undertake this task. Forty-four percent of employees do not know how many years they have planned for retirement, and only one in five feels confident they know how much annual income they will receive from their retirement savings.
Because they don’t have a handle on their financial needs in retirement, many employees feel unprepared and unsure about their savings efforts – more than half (52%) are behind where they had hoped to be in building up retirement savings. The same percentage is concerned about outliving their retirement money, and even more (54%) are worried about having enough steady income during retirement to cover costs of medical insurance and/or out of pocket medical costs.
“There are additional ways employers can help employees,” noted Michael K. Farrell, executive vice president, Distribution, for MetLife, in the press release. “Almost half of employees are interested in their employer automatically enrolling them in a savings program, such as a 401(k), 403(b) or 457. Over 60% believes it would be very helpful if their organization provided a statement that shows how much income the employee’s savings would provide in retirement, and 45% would like their employer to offer an annuity as part of their 401(k) or similar plan. Offerings at work such as these can have a strong influence on employees’ preparedness for retirement.”MetLife’s study also found over 60% of Baby Boomers indicate they are behind in saving for retirement (see Employees Fear Retirement Situation), and employees have disparate preferences when it comes to benefits communications (see Employees Want Kicked up Benefits Communications).