401(k) Participants Expect to Slow Retirement Savings as Worries about Health Care Expenses Take Center Stage – Mercer Work...
19 11월 2013 - 11:15PM
Business Wire
Employees who save for retirement through their employers’
401(k) plans are not planning to sock away more for retirement over
the next year as compared to last. In fact, those closest to
retirement are actually decreasing their planned savings for the
future.
These alarming facts were revealed in the latest edition of the
annual Mercer Workplace Survey™,
(http://www.mercer.com/workplace-survey) a nationally
representative survey of retirement plan participants who also
receive health benefits at work. While participants in general are
more optimistic about the economy, they are planning to save
slightly less over the next 12 months, and those over the age of 50
have lowered their expected savings amounts by about 18%.
“What we see in the attitudes of retirement plan participants is
that they are not feeling the rewards of an improving economy in
their own personal situation and therefore seem hesitant or feel
unable to give up access to immediate cash in order to save for the
future,” said Dave Tolve, Defined Contribution Business Leader for
Mercer’s administration business. “Savings rates obviously tie to,
and build, participants’ expectations for retirement — and right
now, those expectations aren’t great. Participants are worried
about paying their future bills and are planning on working
longer.”
Participants clearly see trouble ahead in achieving a
comfortable retirement. Nothing exemplifies this better than a
retirement concern that was barely on the map a few years ago:
paying for health care in retirement. Since 2007, saving for health
care expenses in retirement has doubled as a major savings goal (up
from 17% to 34%) — yet only 35% believe they’ll have enough money
to pay for it. This issue is now the number one concern and the
“biggest financial worry” amongst those 50 years and older (see
Figure 1).
“The worries about health care in retirement just exemplify the
contradictions we see across this year’s survey results,” said Mr.
Tolve. “Generally speaking, people feel good about the economic
direction of the US and their particular investment decisions, yet
are pessimistic about their retirement outlook and are not taking
meaningful steps to address those concerns. Most are worried about
health care in retirement, yet most think they won’t have enough
money to pay for it. The logical conclusion would be to see an
increase in savings to tackle this expected problem, but our survey
shows this is not the case.”
These diverging participant attitudes should be of grave concern
to employers who sponsor retirement savings plans, particularly
those facing issues such as career path choke points, aging
workforces and low employee engagement. “It is important for
sponsors to realize that instituting plan features such as
automatic enrollment are just not enough,” said Amy Reynolds, US
Defined Contribution Consulting Leader for Mercer’s Retirement
business. “Sponsors should be frequently assessing the impact of
their participants’ behavior on their ultimate ability to retire
and intercede with program changes before workforce management
issues arise.”
Mercer is encouraging plan sponsors to take significant steps to
improve the retirement saving abilities and outlook of their
participants by:
- Educating participants through various
media about the value of tax-advantaged retirement savings versus
other savings vehicles.
- Demonstrating how saving a bit more
today can have an enormous impact in meeting anticipated costs of
tomorrow, even for those over age 50.
- Providing easy-to-use online tools and
resources to influence participants in a way that is meaningful and
relevant to them.
“Anyone involved in helping Americans save for a successful
retirement should take a hard look at their current plans and
programs in terms of education, engagement, and suggested actions,”
said Mr. Tolve. “The Mercer Workplace Survey puts in plain terms
the real challenges our participants see and feel and we need to do
everything we can to improve the situation.”
About the Mercer Workplace Survey
The 2013 Mercer Workplace Survey tracks employee attitudes
toward, and experiences with, employer-sponsored retirement, health
and benefits programs. The survey represents a national
cross-section of active 401(k) participants, defined as those
currently contributing to a 401(k) plan regardless of balance, or
those having a balance of $1,000 or more with their current
employer whether or not they are currently contributing. Eligible
non-participants and those only holding balances at previous
employers are not included in this research. Respondents are also
required to be enrolled in their employer’s health plan. Online
interviews were completed with 1,506 participants between May 28
and June 5, 2013. The survey’s margin of error is plus/minus 2.4%.
To download a free copy of the executive summary please visit
http://www.mercer.com/workplace-survey.
About Mercer
Mercer is a global consulting leader in talent, health,
retirement, and investments. Mercer helps clients around the world
advance the health, wealth, and performance of their most vital
asset – their people. Mercer’s more than 20,000 employees are based
in 42 countries, and the firm operates in over 140 countries.
Mercer is a wholly owned subsidiary of Marsh & McLennan
Companies (NYSE:MMC), a global team of professional services
companies offering clients advice and solutions in the areas of
risk, strategy, and human capital. With over 53,000 employees
worldwide and annual revenue exceeding $11 billion, Marsh &
McLennan Companies is also the parent company of Marsh, a global
leader in insurance broking and risk management; Guy Carpenter, a
global leader in providing risk and reinsurance intermediary
services; and Oliver Wyman, a global leader in management
consulting. For more information, visit www.mercer.com. Follow
Mercer on Twitter @MercerInsights.
Figure 1: What’s your biggest financial
worry right now – the problem that keeps youawake at night?
(Top 5 responses from participants aged 50 and older)
June2013
June2012
July2011
June2010
June2008
June2007
Your health careexpenses
inretirement
23 % 16 %
16 % n/a n/a
n/a
Saving enough
forretirement
22 % 24 %
27 % 29 % 18
% 21 %
Just keeping up withyour
monthlyexpenses
18 % 14 %
15 % 14 % 14
% 14 %
Long-term care foryou or your
spousewhen they need it
17 % 14 %
15 % 18 % 15
% 12 % Credit-card debt
6 % 9 % 7 %
7 % 8 % 11
%
Source: Mercer Workplace Survey™ 2013
MercerBruce M. Lee, 212-345-0553bruce.lee@mercer.com
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