DETROIT (WWJ) – In a recent nationwide survey of American workers who are eligible to participate in an employer-sponsored defined contribution retirement plan, both men and women are concerned about saving enough for retirement – but for women, just keeping up with monthly expenses is an even bigger concern.
The proprietary survey, sponsored by MassMutual Retirement Services, indicates that the weak economy is weighing heavily on the minds of American workers.
Among survey respondents, 31 percent believe the United States will be in a recession in the next 12 months and 38 percet are somewhat or very concerned about losing their jobs.
Overall, the biggest financial worry is “just keeping up with monthly expenses” (21 percent) closely followed by “saving enough for retirement” (18 percent).
Saving enough for retirement is the biggest financial worry for men, but women are far more concerned about just keeping up with monthly expenses – in fact, more than twice as many women are concerned about monthly expenses than saving enough for retirement.
Interestingly, respondents under age 30 have significant concern about saving to buy a home, indicating that there is still an appetite for home ownership among younger workers. Keeping up with monthly expenses was their only larger concern.
The top two concerns for people over the age of 60 are “expense of catastrophic illness” and “long term care for yourself or your spouse when you need it” – two factors that have potential to rapidly deplete retirement savings.
In terms of being able to retire, 35 percent of respondents have considered delaying retirement beyond their original target date, and that percentage jumps to more than 50 percent for people currently age 50 and older.
In addition, 64 percent of people expect to work at least part-time in retirement and 54 percent expect they will need to reduce their standard of living. Women expect to work longer than men, with an average expected retirement age of 66.9 compared to 65.6 for men.
On a positive note, the percentage of respondents who took action likely to improve their retirement savings was far higher than that of the respondents who took action that could harm their chances for a comfortable retirement.
The three most frequently cited positive actions taken by respondents were increasing savings percentages through workplace retirement plans (19 percent), reallocating existing portfolios (19 percent), and contributing to a regular IRA (18 percent).
Actions taken that could harm respondents’ retirement savings outcome included decreasing contribution percentages in their workplace retirement plan (8 percent), taking loans (8 percent), stopping saving in their workplace retirement plan altogether (7 percent), or making hardship withdrawals (4 percent).
The data also shows that there is plenty of opportunity for retirement plan advisors to help participants prepare for retirement. Only 29 percent of respondents currently have, or have had in the past five years, a relationship with a personal financial advisor.
The nationwide survey was conducted online between June 29 and July 29, and included 2,170 defined contribution plan participants who are eligible to participate in a 401(k), 403(b), 457 or similar workplace retirement plan.