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December 31, 2002
Employees Fall Behind in Savings
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Despite strong concerns about having enough money in retirement, most employees (67 percent) surveyed are behind in their retirement savings or haven't started saving yet. The same holds true for education savings, with 55 percent of employees surveyed with children estimating that they are significantly behind in their education savings goals and 28 percent admitting they have done no education planning.
"Now, more than ever, employees need to save for retirement," says Judy Weiss, executive vice president, MetLife Retirement & Savings. "With increased longevity, the shift from traditional pensions to 401(k) plans, uncertainty about the direction of Social Security and the stock market, and escalating healthcare and long-term care costs, individuals must make retirement planning a priority or run the risk of outliving their retirement savings."
Despite their proximity to retirement, older employees (age 31-50) surveyed are less prepared than younger employees (age 21-30), according to the study. While 57 percent of employees surveyed age 21-30 are behind in their savings or haven't started yet, 68 percent of employees age 31-40, 71 percent of employees age 31-50 and 66 percent of employees age 51 and older are similarly unprepared. In fact, 22 percent of employees surveyed over the age of 50 have "done no retirement planning," compared with 20 percent of employees age 41-50 and 25 percent of employees age 21-30.
This year, 28 percent of employers list "providing retirement education/planning" as the second most important employee benefits strategy behind "work/life balance." In large part, this interest is driven by employee concern about retirement, MetLife says.
Employees surveyed age 41-50 are the most worried about outliving their retirement savings, with 83 percent of employees in this age bracket expressing strong concern. Women are somewhat more concerned than men, with 84 percent of females characterizing themselves as very worried versus 74 percent of men.
While a fifth have done no retirement planning, 25 percent have had formal discussions about their retirement with a financial planner and 18 percent have completed a financial plan.
The study was conducted during the third quarter of 2002 and consists of two distinct surveys: an employer survey conducted by Innovative Concepts Inc., and an employee survey conducted by RoperASW. A total of 605 HR/Benefits executives from companies with at least 50 employees were polled for the employer survey. The employee survey was conducted among 1,038 active full-time employees, age 21 and older, and also from companies with at least 50 employees. Both surveys were fielded during July and August via a web-based survey method.