Amid General Concern about Retirement Preparedness, Americans Support Increased Employee Participation in Savings Plans
Wednesday, April 21, 2010
New York, NY – Seven in ten U.S. adults surveyed by Ipsos Public Affairs on behalf of ING U.S. Retirement Services (70%) feel that the private retirement savings system in the U.S. is working fine but could be made even better according to a new study. While nearly as many respondents (60%) say that they are concerned that they will not be prepared for retirement when the time comes, those with an employer-sponsored retirement saving account are less likely to worry than are those with no savings plan at all (56% vs. 69%).
Despite these concerns, less than one in ten (9%) view “helping Americans save more for retirement” as a top policy priority for lawmakers in Washington among a list of a dozen options. Rather, strengthening the economy and reducing unemployment (53%), revamping healthcare (38%), and improving education (26%) rank among the top domestic issues that should be addressed by Congress and the Obama Administration. In parallel, nearly three-quarters of those polled (74%) believe that saving for retirement is an individual responsibility and not the government’s job, signaling that most feel there is a need to take personal ownership of their financial future.
These are some of the findings of an Ipsos poll conducted March 18-22, 2010. For the survey, a nationally representative sample of 1,000 randomly-selected adults aged 18 and over residing in the U.S. was interviewed by telephone via Ipsos’ U.S. Telephone Express omnibus. With a sample of this size, the results are considered accurate within ±3.1 percentage points, 19 times out of 20, of what they would have been had the entire population of adults in the U.S. been polled. The margin of error will be larger within regions and for other sub-groupings of the survey populations. These data were weighted to ensure the sample's regional and age/gender composition reflects that of the actual U.S. population according to data from the U.S. Census Bureau.
A Majority Worry that They Will Not Be Prepared for Retirement
Though it is not the top domestic priority for many Americans, saving for retirement is major concern on a more personal level: 77% say that they take an active role in managing their retirement savings and investment and 69% say that they have a good sense of how much they need to save. However, two thirds (66%) say that they are not able to save as much as they’d like because they aren’t putting enough money away.
Americans with an employer-sponsored retirement savings plan – such as a 401(k) – tend to be more confident than those without any kind of retirement savings vehicle, taking a more active role and making saving more of a priority:
- More than eight out of ten (84%) respondents with a defined contribution workplace plan said that they take an active role in managing their retirement savings, versus only about half (53%) without any type of retirement savings plan.
- Three-quarters of respondents enrolled in a plan (75%) claimed to understand how much they needed to save, compared to six in ten (60%) without any plan.
- For those with an employer-based plan, less than three in ten (28%) said that saving for retirement wasn’t a priority right now. However, that number jumps to nearly six out of ten (58%) among those without any type of saving strategy.
- Despite their participation in a plan, over half of these respondents (56%) are worried that they aren’t going to be prepared for retirement. Still, that number is lower than the nearly seven in ten (69%) without a plan who are worried about their future.
Americans Want Employers to Be More Proactive in Facilitating Employee Retirement Savings
Seven in ten (70%) agree that the current private retirement savings system is working fine, but could be made even better with a few adjustments. One if the things that they would like to see is employers making more of an effort to help their employees save for retirement. Not only would Americans like to see employers – of any size – offer retirement plans, but they also want employers to provide tools to help employees better understand how much they should be saving.
Nearly nine in ten (88%) believe that employers should offer a diverse selection of investment options to employees who participate in their workplace retirement savings account. Three quarters (77%) also say that all employers – even small businesses – should make some type of retirement savings plan available to their employees.
However, many want to see employers take it a step further; Americans would like employers to offer more comprehensive services as well. At least three quarters agree that employers should:
- Show employees what the “lump sum” of their accumulated retirement savings would be if they converted that amount into a monthly income stream when they retire - and how long that would last them (84%);
- Provide the education and tools necessary to help employees better understand about saving for retirement (83%); and
- Offer strategies in their retirement plans that make saving more automatic so that employees don't have to think about it (75%).
Similarly, when asked what the main objectives for reforming the private retirement savings system should be, respondents were most likely to select “helping educate people so they know more about the retirement products and services that are available to them” (43%), again highlighting the importance that they place on education and increasing financial literacy. Other preferred goals for these reforms are increasing the security of retirement savings and investments (24%), encouraging increased contribution levels (22%) and promoting greater participation when workplace retirement plans are made available (20%).
However, majorities of those surveyed (63%) are not aware that many of these ideas have been proposed to change the private retirement savings system. Additionally, half (51%) say that the debate about reforming the system is too complex for them to understand.
For more information on this news release, please contact:
Senior Vice President
Ipsos Public Affairs
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