|[March 18, 2014]
Confidence Rebounds-for Those in Retirement Plans
WASHINGTON --(Business Wire)--
A new survey says Americans' confidence in their ability to afford a
comfortable retirement has recovered slightly from the record lows of
the past five years-primarily among those participating in retirement
plans. But overall, actual preparations for retirement haven't improved.
Confidence Survey, released by the nonpartisan Employee
Benefit Research Institute (EBRI) in Washington, and co-sponsored by
Financial Group®, finds:
Eighteen percent of workers are now very confident, up from 13 percent
Retiree confidence increased even more with 28 percent now very
confident, up from 18 percent in 2013
The increase in confidence was almost exclusively among those with
higher household income and those participating in a retirement
plan-defined contribution, defined benefit, or individual retirement
account (IRA). The percent of workers in a plan who are very confident
increased from 14 percent in 2013 to 24 percent in 2014. Only nine
percent of those not in a plan were very confident, essentially
unchanged from 10 percent in 2013. Workers without a plan are four times
(46 percent) more likely to say they are not at all confident about
retirement than those with a plan (9 percent).
Overall reported worker savings remain low and only a minority appear to
be taking basic steps to prepare for retirement. Managing daily expenses
and the cost of living are the number one reasons workers give for not
saving more. Debt is a problem for 58 percent of workers. The exception
is among those who have taken
some kind of action to plan and save.
"Our analysis shows those who are participating in a retirement plan,
their savings need or worked with a financial professional are not only
more confident, they have less debt and higher levels of savings," said
Greg Burrows, senior vice president of retirement and investor services
at The Principal®. "Having a plan for both spending
and saving can help manage short term needs and pave the way for
more security in the future. The key is to take action."
The Principal analysis
of the survey data found those in a retirement plan were twice as
likely to calculate their retirement need, receive investment advice
from a financial professional and report they retired as planned.
Among other key findings available on the EBRI website at www.ebri.org:
Workers have high savings goals: Twenty-two percent of workers
say they need to save between 20 and 29 percent of their income.
Another 22 percent indicate they need to save 30 percent or more.
However, those without a retirement plan (IRA, defined contribution,
or defined benefit) are more likely to set the target at 50 percent of
income or to say they don't know how much they need to save.
Most haven't calculated savings needs. Only 44 percent
of workers report they and/or their spouse have tried to calculate how
much money they will need to have saved for a comfortable retirement.
But workers who do, tend to have higher levels of savings and
confidence than those who have not.
Best laid plans: Sixty-five percent of workers expect
to work for pay in retirement but only 27 percent of retirees
report they actually do work for pay in retirement. Nearly half
say they retired earlier than planned due to health reasons.
Download the infographic
and view the full results at www.principal.com/banners/landing/2014-retirement-confidence-survey.htm
For more news and insights from The Principal, connect with us on
Twitter (News - Alert) at http://twitter.com/ThePrincipal.
About the Retirement Confidence Survey
This is the 24th
annual Retirement Confidence Survey, making it the longest-running
annual survey of its kind in the nation. The Retirement
Confidence Survey is conducted by the nonpartisan Employee Benefit
Research Institute (EBRI) and Mathew
Greenwald and Associates. The Principal
Financial Group is among about two dozen organizations that provided
funding for the survey.
About the Principal Financial Group
The Principal Financial
Group® (The Principal®)1 is a global
investment management leader offering retirement services, insurance
solutions, and asset management. The Principal offers businesses,
individuals, and institutional clients a wide range of financial
products and services, including retirement, asset management, and
insurance through its diverse family of financial services companies.
Founded in 1879 and a member of the FORTUNE 500®, the
Principal Financial Group has $483.2 billion in assets under management2
and serves some 19.4 million customers worldwide from offices in
Asia, Australia, Europe, Latin America, and the United States. Principal
Financial Group, Inc. is traded on the New York Stock Exchange under the
ticker symbol PFG. For more information, visit principal.com.
1 "The Principal Financial Group" and "The Principal" are
registered service marks of Principal Financial Services, Inc., a member
of the Principal Financial Group.
2 As of December 31, 2013.
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