Retirement is a concern. Businesses from corporations to the smallest organization are decreasing benefits or doing away with them altogether. Some of us only have Social Security to rely upon in our retirement years.
The National Institute for Retirement Security (NIRS) released information from a new survey that indicates employees are so concerned about retirement that a large percentage say they’d take retirement guaranteed income in exchange for limited pay raises.
• 82% say a pension is worth having because it provides a steady income that won’t run out.
• 67% are willing to take smaller pay increases in exchange for that guaranteed income.
The report says people are cognizant of the nation’s retirement crisis and want to protect themselves from one in their lives. And one definitely exists — or so the report concludes — “NIRS calculates that the U.S. retirement savings deficit is at least $6.8 trillion based on the most generous measure of household assets net worth, which includes assets like home equity beyond financial assets.”
Here are other conclusions:
• 86% rightly think there is a retirement crisis.
• The highest income earners know this more than those with lower incomes.
• In a 2010 report — the report found — 38 million of us don’t have an employer-sponsored retirement plan or an IRA.
• Households with retirement plans have 2.4-times the income of those without a retirement account.
• A very high percentage of us agree public employees ought to have retirement plans.
• An equally high percentage does not know that taxpayers pay for 3/4 of the pension costs.
“More than 8 out of 10 Americans — a vast majority — say that all workers, not just public employees, should have a pension. Some 87% of Americans say pensions are a good way to recruit and retain qualified teachers, police officers and firefighters,” the NIRS survey concludes.
Here are other conclusions from the survey:
• 77% are going to cut back spending when they get to retirement.
• 72% are going to stay on the job as long as possible.
• 64% are going to cut current spending.
• 63% say they’ll save 1% to 4% more than they are currently saving for retirement.
The NIRS said the major downside of older workers staying on the job is that it does away with opportunities for those that are younger and needing jobs. The other downside is retirees cutting spending will have a negative impact on the economy.
The report also notes the current wage stagnation is another big impact on retirement savings. “The reality today is that Americans need to save more money because they are living longer and to cover health care costs in retirement as employers move away from offering retiree health insurance. Between 1988 and 2013, the share of large companies offering retiree health care plummeted from 66% to 29%.”
Here’s another unfortunate finding. The survey found that 66% of us are going to have to depend mostly on Social Security benefits for income when they retire.
In a separate report, the NIRS found some positives:
• 74% of us are concerned about having enough income for retirement.
• That’s down from 85% in 2013.
• 84% expect the money from their retirement plan to be there when they retire.
• That’s up from 79% in 2013.
And all agree those with retirement plans in place will have a more secure retirement than those that do not have one.
Source links — two reports from Employee Benefit News: Report 1 and Report 2