New concerns are on the radar of those saving for retirement. Employees who save for retirement through their employers’ 401(k) plans are anticipating less savings for retirement as compared to the last, according to the latest addition of the annual Mercer Workplace Survey™. This nationally representative survey of retirement plan participants who also receive health benefits at work found that while participants in general are more optimistic about the economy, they are planning to save slightly less over the next 12 months, and those over the age of 50 have lowered their expected savings amounts by about 18 percent.
One of the new widespread worries the survey exemplified is regarding health care in retirement, now the “biggest financial worry” amongst those 50 years and older. Since 2007, saving for health care expenses in retirement has doubled as a major savings goal (up from 17 percent to 34 percent) — yet only 35 percent believe they’ll have enough money to pay for it.
These diverging participant attitudes should be of grave concern to employers who sponsor retirement savings plans, particularly those facing issues such as career path choke points, aging workforces and low employee engagement.
Mercer is encouraging plan sponsors to take significant steps to improve the retirement saving abilities and outlook of their participants by:
• Educating participants through various media about the value of tax-advantaged retirement savings versus other savings vehicles.
• Demonstrating how saving a bit more today can have an enormous impact in meeting anticipated costs of tomorrow, even for those over age 50.
• Providing easy-to-use online tools and resources to influence participants in a way that is meaningful and relevant to them.