A news release from the Employee Benefit Research Institute (EBRI) about the 2005 Retirement Confidence Survey (RCS) poll conducted with Mathew Greenwald & Associates said some 72% of respondents reported that such a company match would be much more likely or somewhat more likely to get them to join up.
Workers in the EBRI poll had other suggestions on getting greater employee plan participation:
- about two-thirds (66%) of noncontributing workers said automatic enrollment in a plan upon being hired would make them very likely or somewhat likely to participate.
- an investment option that automatically provides workers a more conservative investment allocation as their retirement date approaches, such as the increasingly popular lifestyle funds (66% of nonparticipants)
- a provision that automatically raises workers’ contributions by a fixed amount when they receive a pay hike (55% of nonparticipants)
- Less than half of workers not contributing to their employer’s plan backed two other options: 49% said they would be more likely to participate if they had a set of mutual fund investment options with a pre-set mix of conservative, moderate and aggressive investments while 35% cited a professional financial manager making investment decisions based on the results of a questionnaire workers completed.
According to EBRI, three in four eligible workers (78%) are offered retirement plans where employers match all or part of their workers’ contributions, the survey found.
Retirement Savings Challenges
As far as retirement savings itself is concerned, the survey found that most workers say they are behind schedule in saving for retirement. But a large majority (66%) believes they will reach their goal by the time they stop working, even if they have only guessed at the amount of money they will need – an indication, EBRI said, that many people’s confidence in their financial future may be misplaced.
As far as why people aren’t saving enough, the RCS found three reasons:
- the cost of paying everyday expenses (49%)
- child-rearing expenses (39%)
- medical costs (35%).
Just over half of workers (51%) said that high expenses are preventing them from achieving their retirement savings goals. Still, nearly eight in 10 workers (79%) said they expect to have at least an adequate standard of living in retirement/
Asked to evaluate their own timetable for planning and saving for retirement, more than half of workers (55%) said they were behind schedule by various amounts. But more than one-third of workers (37%) said they were on track.
Other survey findings included:
- despite expressing overall confidence about their retirement, workers are worried about paying for health care. For example, 51% said they were not at all confident or not too confident of having enough money to pay for nursing home care or in-home care.
- more than six in 10 workers (62%) said they and their spouse are currently saving, a level that is statistically equivalent to the 58% level found in 2004.
- other than for retirement, the most frequently cited reasons for why workers save was to pay for the education of their children or grandchildren.
- two-thirds of workers (66%) said they expect to work for pay in retirement.
The latest RCS was conducted in January 2005 through 20-minute telephone interviews with 1,253 Americans age 25 and older. More information is at www.ebri.org .