Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
WESTWOOD, Mass., Aug. 6, 2014 /PRNewswire/ -- According to a new survey conducted by New York Life Retirement Plan Services (New York Life), a leading provider of retirement plan solutions to U.S. corporations and unions, the majority of 1,500 retirement plan participants polled have felt moderate to severe financial stress over the last six months. In addition, women feel less prepared overall than their male counterparts for retirement and report higher amounts of stress as a result.
According to New York Life's 2014 Financial Stress and Retirement Readiness Report, 73% of those surveyed reported feeling extreme or moderate financial stress over the last six months. In addition, 60% of survey respondents said they were behind or far behind schedule in saving for retirement. Women reported both higher levels of extreme stress and higher amounts of unpreparedness than men.
The issues triggering financial stress for those surveyed include: keeping a job or searching for one; the ability to afford healthcare in retirement; and the perception that Social Security and Medicare will not be available by the time respondents retire. In fact, two-thirds or more of respondents believe Social Security and Medicare will not be available when they need it.
Also, more than half of respondents said they have done a poor job of investing and saving for their children's education, which are additional stressors.
Some further highlights of the survey include:
"As retirement plan providers, we must recognize that saving for retirement is only one of many financial stressors that affect Americans today, so we need to help plan participants manage a lot more than their 401(k) plan," said Patrick Murphy, CEO of New York Life Retirement Plan Services. "Ultimately, helping employees reduce financial stress will create happier and more productive workforces for our clients."
Solutions to Financial Stress
New York Life also asked survey participants about ways financial stress can be alleviated and many reported that obtaining a financial plan, learning basic budgeting skills, consolidating and/or paying down their debt, and setting aside enough money to cover basic needs in retirement would be helpful to feel better prepared for retirement.
Many also reported that they would feel more secure if employers automatically increased contributions to their retirement plans, and if products such as retirement savings projections and retirement budgeting tools were provided.
The Financial Stress and Retirement Readiness Survey was conducted by Greenwald & Associates on behalf of New York Life from April through May 2014. The online survey involved more than 1,500 interviews with plan participants on New York Life's platform. For a summary of the report, please click https://cdn.rps.newyorklife.com/005F9D/docs/2850financialstresssurveyresultsbrochure.pdf.
About New York Life Retirement Plan Services
New York Life Retirement Plan Services offers bundled retirement plan solutions and defined contribution investment only products throughout the United States. New York Life Retirement Plan Services, a division of New York Life Investment Management LLC, (New York Life Investments) administers $67 billion in bundled retirement plans as of April 30, 2014. With offices in Westwood, Massachusetts and Parsippany, New Jersey, New York Life Retirement Plan Services is widely recognized for its leadership within the retirement plan industry.
About New York Life Investments
New York Life Investments, a wholly owned subsidiary of New York Life Insurance Company, is a leading investment management firm, with $535 billion in assets under management, as of June 30, 2014. New York Life Investments ranks among the world's largest asset managers* and through its multiple-boutique investment structure, offers access to an array of fixed income, equities and alternative products for institutional and retail clients. New York Life Investments is also a leading provider of retirement plans for corporations, multi-employer trusts, and individuals, and is recognized as one of the nation's top providers of guaranteed products to both the qualified and non-qualified markets. "New York Life Investments" is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC.
* Source: New York Life Investments ranked 29th among the world's largest money managers within Pensions & Investments, May 26, 2014. Rankings are based on total worldwide institutional assets under management for the year-end 2013. New York Life Investments assets include assets of affiliated investment advisors.
SOURCE New York Life Retirement Plan Services