- Nearly three quarters (74%) of the respondents indicate that they were satisfied with the career choices they made before retirement. However, having their dream career in retirement is still envisioned by about 10 percent of participants.
- The majority (65%) of DC participants picture themselves maintaining their current lifestyle in retirement.
- Sixty-four percent of survey respondents between 50 and 75 years recommend investing earlier to their younger selves, another indication that those in middle-age are more apprehensive about retirement.
Plan Sponsor Improving Employees’ Retirement Planning IQThere are many factors outside of the control of these survey respondents that can’t be anticipated. Today, less than 19 percent of those 65 years and older are still working 1. Whether it’s poor health or overall difficulty maintaining employment because of out-of-date professional skills, there are a number of challenges. Twenty-seven percent of those surveyed, who were already retired, felt they had been forced into it. SSgA’s most recent data shows that the conversations plan sponsors have with participants are imperative. Historical data also supports that retirement confidence rises when more conversations are had with family members, online or with an employer 2. This dialogue will become more challenging and complex as the composition of the workforce changes and the meaning of retirement becomes more individualized. However, plan sponsors can help participants best achieve retirement readiness by increasing the number and the relevance of conversations about current needs and what a realistic future is for plan participants throughout their employment. Plan sponsors should keep three main points in mind as they consider retirement interventions with their employees:
- Focus special attention on younger employees. Their long time horizons give them more opportunity to potentially benefit from a greater understanding of their savings options. Nearly 80 percent of DC investors surveyed would advise their younger selves to save more for retirement.
- Introduce or expand automated features. In January 2013, a previous survey from SSgA found that participants do not want to be left to their own devices when it comes to saving for retirement 3, and that they value help from plan sponsors, specifically as it relates to auto-enrollment and auto-escalation.
- Help build participants’ overall financial wellness and aim to expand the conversation beyond a sole focus on retirement readiness. Participants will be better prepared for retirement if they are equipped to balance current needs and future goals throughout their careers. This becomes increasingly important as 49 percent of participants in SSgA’s January 2014 survey were looking to shift to more conservative investments 4 and only about one third of the DC investors in the most recent survey use a financial advisor. Plan sponsors can engage participants throughout their employment with targeted communications that will help them meet obligations and be ready to retire when and how they see fit.
Primary researchThis survey was fielded in partnership with TRC Market Research, an independent marketing research firm located in suburban Philadelphia. To protect respondents’ anonymity, TRC was responsible for survey administration and data analysis. SSgA received the aggregate data for analysis purposes only. The data were collected in April 2014 through a 10-minute Internet survey using a panel of 980 verified 401(k), 403(b), 457 and profit-sharing plan participants and retirees, aged 30 and older. 1Current Population Survey 2013, U.S. Bureau of Labor Statistics. 2SSgA DC Investor Survey, January 2013 3SSgA DC Investor Survey, January 2013 4SSgA DC Investor Survey, January 2014 The views expressed in this material are the views of State Street Global Advisors through the period ended 06/26/2014 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information. Investing involves risk including the risk of loss of principal. CORP-1046