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The New Retirement: Working 12th Annual Transamerica Retirement Survey May 2011 ... “Outliving their money” and “not mee
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The New Retirement: Working 12th Annual Transamerica Retirement Survey May 2011 TCRS 1055-0511 © Transamerica Center for Retirement Studies, 2011
Table of Contents • • • • • • • •
About The Center About The Survey Methodology Terminology Executive Summary Survey Findings Conclusion Appendix
Page 3 Page 4 Page 5 Page 6 Page 8 Page 13 Page 35 Page 37
© Transamerica Center for Retirement Studies, 2011
2
About The Center •
The Transamerica Center for Retirement Studies® (“The Center”) is a non-profit private foundation dedicated to educating the public on emerging trends surrounding retirement security in the United States. The Center’s research emphasizes employer-sponsored retirement plans, issues faced by small to mid-sized companies and their employees, and the implications of legislative and regulatory changes.
•
The Center is funded by contributions from Transamerica Life Insurance Company and its affiliates and may receive funds from unaffiliated third-parties. For more information about The Center, please refer to www.transamericacenter.org.
•
The Center and its representatives cannot give ERISA, tax or legal advice. This material is provided for informational purposes only and should not be construed as ERISA, tax or legal advice. Interested parties must consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here.
•
Although care has been taken in preparing this material and presenting it accurately, The Center disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it.
© Transamerica Center for Retirement Studies, 2011
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About The Survey •
Since 1999, the Transamerica Center for Retirement Studies® has conducted a national survey of U.S. business employers and workers regarding their attitudes toward retirement. The overall goals for the study are to illuminate emerging trends, promote awareness, and help educate the public.
•
Harris Interactive was commissioned to conduct the Twelfth Annual Retirement Survey for Transamerica Center for Retirement Studies®. Transamerica Center for Retirement Studies® is not affiliated with Harris Interactive.
© Transamerica Center for Retirement Studies, 2011
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Methodology •
A 25 minute, online survey was conducted between January 31, 2011 – March 10, 2011 among a nationally representative sample of 4,080 workers using the Harris online panel. Respondents met the following criteria: • All U.S. residents, age 18 or older • Full-time or part-time workers in a for-profit company employing 10 or more people
•
Data were weighted as follows: – –
• •
Percentages are rounded to the nearest whole percent. Differences in the sums of combined categories/answers are due to rounding. Significance is tested at 95% confidence and is indicated throughout the report in the following ways: – –
•
To account for differences between the population available via the Internet versus by telephone. To ensure that each quota group had a representative sample based on the number of employees at companies in each employee size range.
Significance between sub-groups is identified by the letters A, B, C, D, E, F, G, etc. next to the significantly higher number for that corresponding sub-group. Significance between Dec. 2009/Jan. 2010 (11th Annual Survey) data and Jan. 2011/Mar. 2011 (12th Annual Survey) data is indicated as follows: = significantly higher in Jan. 2011/Mar. 2011 (12th Annual Survey) = significantly lower in Jan. 2011/Mar. 2011 (12th Annual Survey)
This report focuses on full-time and part-time workers combined.
© Transamerica Center for Retirement Studies, 2011
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Terminology This report uses the following terminology: • • • •
Echo Boomer: a person born after 1978 Generation Xer: Born 1965 - 1978 Baby Boomer: Born 1946 - 1964 Mature: Born before 1946
© Transamerica Center for Retirement Studies, 2011
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The New Retirement: Working 12th Annual Transamerica Retirement Survey
© Transamerica Center for Retirement Studies, 2011
7
Executive Summary •
The 12th Annual Transamerica Retirement Survey—conducted among 4,080 American workers—found that for many Americans, the foundation of their retirement strategy is simply to not retire or to work considerably longer than the traditional retirement age of 65. Overall, American workers’ confidence in their ability to achieve a financially secure retirement is low.
•
The research underscores how American workers are largely unprepared for retirement and, further, how relatively few have a backup plan in the event they are forced into retirement earlier than planned.
•
While working longer is an important opportunity to help bridge a retirement savings gap -- planning not to retire is not a viable retirement strategy.
•
Setting a goal, making a strategy, and preparing for the unexpected are necessary to ensure a financially secure retirement.
© Transamerica Center for Retirement Studies, 2011
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Executive Summary •
The survey found that for many Americans, the foundation of their retirement strategy is simply not to retire, to work considerably longer than the traditional retirement age, or work in retirement: – – –
39 percent of workers plan to work past age 70 or do not plan to retire 54 percent of workers expect to plan to continue working when they retire 40 percent now expect to work longer and retire at an older age since the recession
•
Workers’ greatest fears about retirement include “outliving my savings and investments” and “not being able to meet the financial needs of my family.”
•
Most workers will continue working out of financial necessity: – – – –
Workers estimate their retirement savings needs at $600,000 (median), but in comparison, fewer than one-third (30 percent) have currently saved more than $100,000 in all household retirement accounts Most workers, regardless of age or household income, agree that they could work until age 65 and still not have enough money saved to meet their retirement needs Of those who plan on working past the traditional retirement age of 65, the most commonly cited reasons are of need versus choice Many workers (31 percent) anticipate that they will need to provide financial support to family members
© Transamerica Center for Retirement Studies, 2011
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Executive Summary •
Over half of workers (56 percent) indicate that they have a retirement strategy; however, only 10 percent said that they have a written plan, compared to 46 percent who said that they have a plan but it is not written down. Of those who indicated that they have a strategy: – – – – –
65 percent have factored on-going living expenses 57 percent have factored Social Security and Medicare benefits 49 percent have factored health care costs 21 percent have factored long-term care insurance 18 percent have contingency plans for retiring sooner than expected and/or savings shortfalls
•
Of all workers, fewer than one in five (19 percent) have a backup plan for retirement income in the event they are unable to work before their planned retirement.
•
Relatively few workers have a good understanding of the government retirement-related benefits such as Social Security (40 percent), Medicare (28 percent), and Medicaid (23 percent).
© Transamerica Center for Retirement Studies, 2011
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Executive Summary •
The survey revealed ways that workers may improve their retirement outlook, including: 1. 2. 3. 4. 5. 6. 7. 8.
Talking about the need to plan and save. Getting the conversation going with friends and family. Just 9 percent frequently discuss saving, investing, and planning for retirement. Formulating a plan and writing it down. Only 10 percent report having a written strategy. Getting educated. Learning about government benefits. Learning about retirement saving and investing (71 percent agreed that they don’t know as much as they should). Considering retirement benefits as part of total compensation when assessing employment offers. Over half (53 percent) said they would choose a job offer with higher pay but poor retirement benefits versus an offer that meets their minimum salary requirements and has excellent retirement benefits. For those whose employer doesn’t offer a plan, asking for one. While 92 percent of workers surveyed consider a self-funded retirement plan as an important benefit, only 71 percent report being offered one. For those who are offered a plan, participating in the plan. Although 78 percent of workers participate, the 22 percent who do not should consider joining the plan. Taking advantage of the Saver’s Credit if eligible (just 25 percent of workers are aware of it). Making Catch-up Contributions if age 50 or older (just 56 percent of workers are aware of it). Creating a backup plan in the event you are unable to work before planned retirement. Only 19 percent report having a back up plan.
© Transamerica Center for Retirement Studies, 2011
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Executive Summary •
The retirement services industry and media should continue to raise awareness and increase education on the need to plan and save – and, also, the need for a backup plan in the event of being forced into retirement sooner than expected due to intervening circumstances such as a job loss, health issues, or family obligation.
•
From a public policy perspective, with so many workers planning to work past age 65, policymakers should consider offering tax incentives for employers to hire older workers along with offering job training / retraining programs for older workers -- to help keep them in the workforce.
© Transamerica Center for Retirement Studies, 2011
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Retirement Confidence Very few workers (10 percent) are very confident in their ability to retire comfortably. Also, very few (9 percent) strongly agree they are building a large enough nest egg. Confidence in Retiring Comfortably: Top 2 Box % (Very/Somewhat Confident) Very confident Somewhat confident
51
50
10
8
41
'11 N=4080
42
Building Large Enough Nest Egg? Top 2 Box % (Strongly/Somewhat Agree)
Strongly agree Somewhat agree
53 10
44
'09/'10
'08/'09
N=3598
N=3466
59 13 38
40
40
9
9
10
29
31
30
'09/'10 N=3598
'08/'09 N=3466
45 12
46
'07 N=3012
'11 N=4080
33
'07 N=3012
BASE: Full and Part-time Q880. How confident are you that you will be able to fully retire with a lifestyle you consider comfortable? Q800. How much do you agree or disagree that you are currently building a large enough retirement nest egg?
© Transamerica Center for Retirement Studies, 2011
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Expected Retirement Age Over half of workers (54 percent) expect to retire between age 60 and 69. However, more than one-third plan to work past age 70 or never retire. In the last 12 months, 40 percent of workers said they now expect to retire later. Change in Expected Retirement Age in the Last 12 Months
Expected Retirement Age
50 to 59
◄ Retire As Expected or Earlier
6
54
6
‘11
Work Longer ► 40
N =4080
60 to 69
54
70+
’09/’10
25
Do Not Plan to Retire
6
66
28
6
65
29
N=3598
14
’08/’09 N=3466
0
10
20
30
40
50
60
■ Expect to stop working sooner and retire at a younger age
■ Expect to retire ■ Expect to work longer at the same time and retire at an older age
BASE: Full and Part-time Q910. At what age do you expect to retire? Q1480. Has the age that you expect to retire changed in the last 12 months?
© Transamerica Center for Retirement Studies, 2011
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Working in Retirement Half of workers plan to work after they retire, mostly in part-time jobs. More than 4 out of 10 of those workers will work out of necessity.
Main Reason for Working After Retirement Age Yes, I plan to work full-time Yes, I plan to work part-time
N=2516
Can't afford to retire or haven't saved enough 54%
34
Need health benefits
Need: 44%
9
9 Want to stay involved
44
19 16
Enjoy what I do Want the income
'11
None of the above
Enjoyment: 35%
18 3
BASE: All Qualified Respondents Q1525. Do you plan to work after you retire? Q1530. What is your main reason for working after retirement or the normal retirement age of 65?
© Transamerica Center for Retirement Studies, 2011
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Retirement Fears “Outliving their money” and “not meeting basic financial needs of families” are the top cited fears about retirement. Single Greatest Fear about Retirement Outliving your money
23
Not meeting basic financial needs of my family
21
Social Security reduced/ cease to exist in the future
15
High cost of healthcare
12
Needing long-term care
7
Not having adequate healthcare
5
Being laid off – not retiring on my own terms
5
Finding meaningful ways to spend time/stay involved
5
Feeling less important/relevant in the world None of the above
2 5
BASE: Full and Part-time 2011: Q1421. What is your single greatest fear about retirement?
© Transamerica Center for Retirement Studies, 2011
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Estimated Retirement Savings Needs Workers estimate that they will need to save $600,000 (median) to feel financially secure when they retire.
Estimated Retirement Savings Needs (N=4080)
Less than $100,000
10%
$100,000 to less than $500,000
24
$500,000 to $1,000,000
24
22
$1,000,000 to $2,000,000 $2, 000,000+ Not Sure
19 2
BASE: All Qualified Respondents (n=4080) Q890. Thinking in terms of what money can buy today, how much money do you believe you will need to have saved by the time you retire in order to feel financially secure?
© Transamerica Center for Retirement Studies, 2011
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Current Household Retirement Savings Only 30 percent of workers indicated they have saved over $100,000 in all household retirement accounts; however, it should be noted that household retirement savings increases with workers’ age ranges. Household Retirement Savings Less than $5,000 $5,000 to less than $10,000 $10,000 to less than $25,000 $25,000 to less than $50,000 $50,000 to less than $100,000 $100,000 to less than $250,000
Household Retirement Savings by Age (%)
12 12
5
$250k or more 8
$100k to less than $250k $50k to less than $100k
8
$25k to less than $50k
10
$10k to less than $25k 13
$5k to less than $10k 17
$250,000 or more Not sure Decline to answer
Less than $5k
5 2 7
14
8
10
9
11
7
Not sure Decline to answer
23 30 16
11 9
10
15
6 3 3 9
7 5 2 1 10 70+
5 13
11
7 7 4 10
20-29
30-39
40-49
50-59
60-69
22 17
14 11
11 15
9 15
8 17
11
18
9
8 5
23
30
16
13 15
15
10 17
BASE: All Qualified Respondents (n=4080) Q1300 Approximately how much money does your household have saved in all of your retirement accounts? Please include IRAs, 401(k)s, 403(b)s, and any other savings for retirement to which you and/or your spouse or partner have contributed funds.
© Transamerica Center for Retirement Studies, 2011
18 18
Doubts about Saving Enough by Age 65 The majority of workers agree that they could work until the age of 65 and still not have enough money saved to meet their retirement needs. I could work until age 65 and still not have enough money saved to meet my retirement needs Top 2 Box
70%
31 Strongly agree Somewhat agree 39
Somewhat disagree
Strongly disagree 19 11
Bottom 2 Box
30% ‘11
N=4080 BASE: Full and Part-time Q931. How much do you agree or disagree with each of the following statements regarding retirement investing? I could work until age 65 and still not have enough money saved to meet my retirement needs
© Transamerica Center for Retirement Studies, 2011
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Doubts about Saving Enough by Age 65 The majority of workers of all generations agree that they could work until age 65 and not save enough for retirement. I could work until age 65 and still not have enough money saved to meet my retirement needs Top 2 Box
71%
D
72%
D
70%
D
56%
19 30 A
36 AB 32 A
Strongly agree Somewhat agree
52 BCD
41 CD
Somewhat disagree
34 D
24
Strongly disagree
Bottom 2 Box
22
20
17
7
8
13 AB
29%
28%
30%
15
29 ABC
44% ABC
N=520
N=1157
N=1994
N=336
Echo Boomer
Gen X
Baby Boomer
Mature
(A)
(B)
(C)
(D)
BASE: Full and Part-time Q931. How much do you agree or disagree with each of the following statements regarding retirement investing? I could work until age 65 and still not have enough money saved to meet my retirement needs
© Transamerica Center for Retirement Studies, 2011
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Doubts about Saving Enough by Age 65 The majority of workers of all levels of household income agree that they could work until age 65 and not save enough for retirement. I could work until age 65 and still not have enough money saved to meet my retirement needs Top 2 Box
80% BC
43 BC
74% C
59%
31 C
Strongly agree
23
Somewhat agree Somewhat disagree
37
42 AC
13 8
18 A
36
Strongly disagree
AB
8
24 AB 18 AB
Bottom 2 Box
20%
26%
A
41% AB
N=1089
N=1507
N=1046
Less than $50,000
$50,000-$99,999
$100,000 or more
(A)
(B)
(C)
BASE: Full and Part-time Q931. How much do you agree or disagree with each of the following statements regarding retirement investing? - I could work until age 65 and still not have enough money saved to meet my retirement needs
© Transamerica Center for Retirement Studies, 2011
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Family Obligations The majority of workers either expect or are not sure if they will need to provide financial support for their family when they retire. Fewer than half (43 percent) expect they will not. Do you expect that you will need to provide financial support for your family while you are retired? N=4080
Not sure Yes 27 31
No 43
BASE: All Qualified Respondents Q1505 (NEW) Do you expect that you will need to provide financial support for your family while you are retired?
© Transamerica Center for Retirement Studies, 2011
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Retirement Strategy: Written Plans Although over half of workers have a retirement strategy, only 10 percent report having a written plan. Which of the following best describes your retirement strategy? ◄ Do not have a plan
Have a written plan and have a plan ►
‘11 44
N =4080
’09/’10 N=3598
’08/’09 N=3466
’07 N=3012
46
10
56
54
45
46
8
41
47
12
46
42
Do not have a plan
Have a plan, but not written down
11
59
53
Have a written plan
BASE: Full and Part-time Q1155. Which of the following best describes your retirement strategy?
© Transamerica Center for Retirement Studies, 2011
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Retirement Strategy Factors Of the 56 percent of workers having a strategy, many factored in on-going expenses and retirement income needs, while just half have factored in healthcare costs, and just over half have factored in Social Security and Medicare benefits. Factored into Retirement Strategy N=2293 On-going living expenses
65
Total retirement savings and income needs
61 57
Social security and Medicare benefits
49
Healthcare costs
47
Investment returns
42
Inflation Tax planning
22
Long-term care insurance
21
Estate planning
21 18
Contingency plans for retiring sooner than expected and/or savings shortfalls
5
Other
9
Not sure 0
20
40
60
80
BASE: Has Retirement Strategy Q1510 (NEW)Which of the following have you factored into your retirement strategy?
© Transamerica Center for Retirement Studies, 2011
24 24
Lack of Contingency Plans Most workers do not have a backup plan in the event they are unable to work before their planned retirement. Only 13 percent of workers who plan to work past age 70 or never retire have a backup plan. Backup Plan for Retirement Income if Unable to Work All Respondents
Backup Plan for Retirement Income if Unable to Work Those Who Plan to Work Past 70 or Never Retire
N=4080
N=1660
Not sure
16
Yes
19
Not sure
13
16
66
No
Yes
71
No
BASE: All Qualified Respondents; Retire After 70 or Do Not Plan to Retire Q1535. In the event you are unable to work before your planned retirement, do you have a backup plan for retirement income?
© Transamerica Center for Retirement Studies, 2011
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Understanding of Government Benefits Relatively few workers have a good grasp of how government benefits will impact their retirement. Social Security has the highest level of understanding while Medicare and Medicaid lag behind.
Social Security
None A great deal 9 13
Medicare
None 21
A great deal 9
Quite a bit 27 Some 51 Some 50
Quite a bit 19
Medicaid
A great deal 8 None Quite a bit 27 15
Some 50
BASE: All Qualified Respondents (n=4080) Q1540. How good of an understanding do you have of the following government benefits?
© Transamerica Center for Retirement Studies, 2011
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Talking About Retirement Although many workers discuss saving, investing, and planning for retirement occasionally, only 9 percent do so frequently. 27 percent never discuss it. How frequently do you discuss saving, investing and planning for retirement with family and friends? Total N=4080
9
Frequently
27 Never
64 Occasionally
BASE: All Qualified Respondents Q1515. How frequently do you discuss saving, investing and planning for retirement with family and friends?
© Transamerica Center for Retirement Studies, 2011
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Retirement Preparation and Involvement Most workers agree that they do not know as much as they should about retirement investing. Many would like more education from their employers. And half would prefer to rely on outside experts. Top 2 Box % (Strongly/Somewhat Agree) ’11
’09/’10
’08/’09
N=4080
N=3598
N=3466
Do not know as much as I should about retirement investing
71
Very involved in monitoring and managing my retirement savings
60
Like more info and advice from my company on how to reach my goals
58
Prefer to rely on outside experts to monitor and manage my plan Prefer not to think about or concern myself with it until closer to retirement
68
61
60
56
51
32
68
56
46
31
44
32
BASE: Full and Part-time Q930. How much do you agree or disagree with each of the following statements regarding retirement investing?
© Transamerica Center for Retirement Studies, 2011
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Retirement Benefits: Importance Compared to Other Benefits The vast majority of workers value a 401(k) or similar retirement plan as an important employee benefit. Top 2 Box % (Very/Somewhat Important)
’11
’09 /’10
08/’09
’07
N=4080
N=3598
N=3466
N=3012
Health insurance 401(k) / 403(b) / 457(b) or other employee self-funded plan
92
Disability insurance Company-funded defined-benefit pension plan
94
94
90
79 75
95
93
91
79
91
84
81
76
78
78
Long-Term Care insurance
68
69
73
72
Life insurance
69
66
72
69
BASE: Full and Part-time Q1171 Businesses typically offer a number of different benefits for their workers. For each of the following, please tell us how important that benefit is to you, personally.
© Transamerica Center for Retirement Studies, 2011
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Higher Salary vs. Better Retirement Benefits Workers show a slight preference towards job offers that would provide a higher than expected salary, but poor retirement benefits.
OPTIONS Excellent retirement benefits, but only meets your minimum salary requirements.
50
A higher than expected salary, but poor retirement benefits.
53
53
53
47
47
47
’11
’09/’10
'08/'09
'07
’11
’09/’10
'08/'09
N=4080
N=3598
N=3466
N=3012
N=4080
N=3598
N=3466
50
'07 N=3012
BASE: Full and Part-time Q830. Suppose that two job offers come your way. Which of the following job offers would you select?
© Transamerica Center for Retirement Studies, 2011
30 30
Retirement Benefits Currently Offered Retirement plan coverage rates have held steady among workers in recent years.
’11 N=4080 Employee-funded 401(k) plan
69
Company-funded defined benefit pension plan Other employee self-funded plan (ex. SIMPLE, SEP)
None of the above
'09/'10 N=3598
25
6
27
65
17
18
5
'07 N=3012 66
68
17
5
'08/'09 N=3466
18
6
28
28
BASE: Full and Part-time Q1180. Which of the following retirement benefits does your company currently offer to you, personally? Select all that apply.
© Transamerica Center for Retirement Studies, 2011
31 31
Retirement Plan Participation While the survey found an overall participation rate of 78 percent, workers from the Echo Boomer generation continue to increase participation in company retirement plans while Gen Xers and Baby Boomers stayed relatively the same. Participation in Company Retirement Plan % Indicate Yes 81 A
83
82
AC
AD
76 A
70
81 A
83
82
81
AD
77
A
A
75
A
76 69
64 57
53
'11 ’09/’10'08/'09 '07
'11 ’09/’10'08/'09 '07
'11 ’09/’10'08/'09 '07
'11 ’09/’10'08/'09 '07
N=341 N=356 N=300 N=247
N=918 N=870 N=632 N=525
N=1495 N=1042 N=1274 N=919
N=192 N=259 N=192 N=357
Echo Boomer
Gen X
Baby Boomer
Mature
(A)
(B)
(C)
(D)
BASE: Full and Part-time; With qualified plans currently offered to them Q1190. Do you currently participate in, or have money invested in your company’s employee-funded retirement savings plan?
© Transamerica Center for Retirement Studies, 2011
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Awareness: Saver’s Credit and Catch-up Contributions Workers’ awareness of both the Saver’s Credit and Catch-up Contributions improved over last year.
Aware of Saver’s Credit, % Indicate Yes
Aware of Catch-up Contributions, % Indicate Yes
56
25
'11 N=4080
20
21
23
’09/’10
'08/'09
'07
N=3598
N=3466
N=3012
'11 N=4080
52
51
’09/’10
'08/'09
N=3598
N=3466
49
'07 N=3012
BASE: Full and Part-time Q520. Are you aware of a tax credit called the “Saver’s Credit,” which is available to individuals and households, who meet certain income requirements, for making contributions to an IRA or a company-sponsored retirement plan such as a 401(k) plan or 403(b) plan? Q1000. Are you aware that people age 50 and older may be allowed to make catch-up contributions to their 401(k)/403(b)/457(b) plan or IRA?
© Transamerica Center for Retirement Studies, 2011
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Awareness: Catch-up Contributions Awareness of Catch-up Contributions increased among all generations with predictably older workers being more aware. Given that the youngest Baby Boomers are now nearing age 50, there’s an opportunity to increase awareness among this generation. % Indicate Yes ABC
75 64 AB 53 A
50 A
54 A
ABC
73
ABC
69
ABC
67
59 AB 59 A 51 A
50 A
39 29
27
28
'11 '09/'10'08/'09 '07
'11 '09/'10'08/'09 '07
N=520 N=552 N=587 N=437
(A)
Echo Boomer
'11 '09/'10'08/'09 '07
'11 '09/'10'08/'09 '07
N=1157 N=1115 N=829 N=698
N=1994 N=1456 N=1688 N=1291
N=336 N=431 N=362 N=586
(B)
(C)
(D)
Gen X
Baby Boomer
Mature
BASE: Full and Part-time Q1000. Are you aware that people age 50 and older may be allowed to make catch-up contributions to their 401(k)/403(b)/457(b) plan or IRA?
© Transamerica Center for Retirement Studies, 2011
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Conclusion •
The 12th Annual Transamerica Retirement Survey found that for many Americans, the foundation of their retirement strategy is simply to not retire or to work considerably longer than the traditional retirement age of 65. Overall, American workers’ confidence in their ability to achieve a financially secure retirement is low.
•
The research underscores how American workers are largely unprepared for retirement and, further, how relatively few have a backup plan in the event they are forced into retirement earlier than planned.
•
While working longer is an important means of bridging a retirement savings gap -- planning not to retire is not a viable retirement strategy.
•
Setting a goal, creating a plan, and preparing for the unexpected are necessary to ensure a financially secure retirement.
•
The vast majority of workers do not have a retirement strategy that is written down.
•
Relatively few have a good grasp of how government benefits will impact their retirement.
© Transamerica Center for Retirement Studies, 2011
35
Conclusion Recommendations for Workers • How each worker plans on spending their retirement is unique, but the tools to reach retirement goals are common to everyone. These tactics can help workers get started developing a strategy: – – – – – – –
Get the conversation going with friends and family Formulate a plan and write it down Get educated about retirement investing Consider retirement benefits as part of your total compensation If your employer offers a plan, participate. If your employer doesn’t offer you a plan, ask for one Take advantage of the Saver’s Credit if eligible. Make catch-up contributions if eligible Have a backup plan in the event you are unable to work before your planned retirement
Recommendations for the Retirement Industry and Media • The retirement industry and media should continue to raise awareness and increase education on the need to plan and save – and, also, the need for a backup plan in the event of being forced into retirement sooner than expected due to intervening circumstances such as a job loss, health issues, family health. Recommendations for Policymakers • From a public policy perspective, with so many workers planning to work past age 65, policymakers should consider tax incentives for employers to hire older workers along with job training / retraining programs for older workers -- to help keep them in the workforce.
© Transamerica Center for Retirement Studies, 2011
36
Appendix Respondent Profiles
© Transamerica Center for Retirement Studies, 2011
37
Profile of Respondents – Total Respondents Full- & Part-time
Full-time
Part-time
Full- & Part-time
Full-time
Part-time
N=4080
N=2873
N=1207
N=4080
N=2873
N=1207
Level of Education Less than high school graduate High school graduate Some college or trade school College graduate Some grad. school/grad. degree
1% 22% 32% 29% 15%
1% 17% 29% 34% 18%
1% 31% 38% 20% 10%
Marital Status Married Single, never married Divorced/widowed/separated Civil union/domestic partnership
60% 23% 12% 5%
62% 21% 12% 6%
56% 28% 12% 4%
Type of Area Lived In Large city Small city Suburbs Rural area
21% 20% 41% 18%
22% 18% 43% 17%
21% 22% 37% 20%
Gender Male Female
52% 48%
61% 39%
34% 66%
Age 18 - 19 20 - 24 25 - 29 30 – 34 35 – 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 and over MEAN MEDIAN
1% 5% 8% 11% 14% 11% 14% 10% 12% 7% 6% 44.3 44