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Despite a strong rebound in the equity markets and signs of a wobbly economic recovery, the proprietary survey, sponsored by MassMutual Retirement Services and conducted by
Retirement tops the list of savings objectives. Overall, "saving enough for retirement" has surpassed "keeping up with monthly expenses" as the biggest financial worry, up significantly to 24% from 18% in 2011. It was also cited as a major savings objective by 63% of participants, 21 points higher than the second most-cited worry of "paying down debt." On a positive note, participants in general are saving more, with the average retirement savings rate among those surveyed at 10.5%, up from 9% two years ago, showing an increased commitment to this goal.
The data also shows that there is huge opportunity for retirement plan advisors to help participants, particularly women, prepare for retirement. Only 28% of respondents currently have, or have had in the past five years, a relationship with a personal financial advisor. However, many more men have one (31%) compared to women (24%), and the gender difference here has increased since 2011 when 30% of men had an advisor vs. 27% of women. Significantly, retirement as a major savings objective is 20 points higher among participants with a professional financial advisor than for those without one (77% vs. 57% respectively). This suggests that having a financial professional helps bring more focus to the need to save for retirement.
Another interesting finding is that, although the retirement plan provider is still cited as the "most important source of investment information" by participants, professional advisors have displaced plan sponsors this year as the second most important source of this information. Of note, satisfaction with information from professional advisors is up sharply (47% "very satisfied" in 2013 vs. 25% in 2011), while satisfaction with information from plan sponsors is down sharply (10% in 2013 vs. 30% two years ago). Men are also much likelier to have a professional advisor and are more confident than women in virtually every aspect of retirement planning and defined contribution investment decisions.
In terms of being able to retire, trends among optimists and pessimists are divided at the age 50 mark. Workers age 50+ are less upbeat than younger ones and are likelier to expect health care costs and inflation to be higher. They also expect unemployment both nationally and locally to be higher. The proportion of workers under age 50 who are considering delaying retirement is up five points while the proportion of workers age 50+ who are considering delaying retirement is down five points. Thirty-seven percent of respondents have considered delaying retirement beyond their original target date, and that percentage jumps to almost 50% for people currently age 50 or older. In addition, 63% of people expect to work at least part-time in retirement and 54% expect they will need to reduce their standard of living. While women still expect to work to a somewhat older age, their average expected retirement age has come down slightly to age 66.4 (vs. 66.9 in 2011). The average expected retirement age for men has gone up to 66 compared to age 65.6 two years ago.
"The evidence that retirement is on the minds of virtually every American worker is encouraging," says
"MassMutual Retirement Services continues to sponsor this important research to help us develop the critical educational resources that financial professionals, plan sponsors and participants need to understand what represents a sufficient level of income in retirement. You can collect a lot of data but, unless you are applying it for the benefit of your customers, you're underserving them. Here at
The nationwide survey was conducted online
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