Data & Research December 5, 2006

Principal Survey Finds Concern about the Future

Almost three-quarters of employees (71%) and half of retirees (50%) said they were very concerned about their long-term financial future, according to the latest Principal Financial Well-Being Index.
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A news release from the Principal Financial Group about its quarterly survey said it also found that 90% of employees and 87% of retirees believe there should not be a mandatory retirement age.

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“When it comes to the ideal retirement age, workers and retirees are in agreement on one thing: it’s a personal decision and not something that government should mandate,” said Dan Houston, executive vice president, Retirement and Investor Services, The Principal, in the news release. “For many, it’s an economic decision to keep working, in order to pay mounting health care bills, keep up with inflation or just to cover the basic necessities. For others, it is simply a desire to stay active, engaged and make a contribution.”

Not all retirees are taking advantage of their extra leisure time, the poll found. A quarter of retirees (26%) indicated they were almost always, often or sometimes bored in retirement. “It is no wonder that many work well beyond their 50s and 60s to pay for their basic necessities and maintain their current financial well being, or just to stay engaged,” Houston asserted.

Meanwhile, focusing on current workplace issues, when asked what employers could do to help them get more out of work, workers still value a pay increase over anything else. Nearly three-quarters of workers (73%) indicated that their employers could provide better pay for performance and almost half (47%) indicated employers could provide better workplace benefits.

Other results included:


  • About three in five (61%) workers indicated they were either satisfied or very satisfied with their employers, while 20% indicated they were dissatisfied or very dissatisfied.

  • When workers were asked how the length of their work week compares with a year ago, nearly three out of ten employees (29%) admitted to working more this year.

  • When asked why they work, respondents said to pay bills (89%), followed by needing benefits (such as health insurance and retirement) (64%) and to saving for the future (51%).

The survey was conducted online within the United States between October 23 to November 1, 2006 among 1,197 employees (ages 18+) and 630 retirees of small- and mid-sized US businesses (10 – 1,000 employees).

The Markets December 5, 2006

Investing Confidence Is No Assurance That Savings Will Last

A recent survey from New York Life Investment Management (NYLIM) found participants confident in their 401(k) investment decisions, but still not sure their savings will last in retirement.
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According to a NYLIM press release, the 2006 survey of 8,958 participants on NYLIM Retirement Plan Services’ platform found 60% of participants agree they are making correct investment decisions in their 401(k) account. At the same time, only about half of all participants said they feel they know how much money they will need in retirement.

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Less than 40% said they believe they are in a good position to meet their financial goals when they retire, the press release said.

Data from the survey showed different participant populations, even within the same company, are interested in significantly different types of retirement planning tools. More than 40% of participants surveyed said they would like someone else to manage their 401(k) account with their input, while 39% agreed with the statement “I tend to rely on advice from a professional financial adviser when making investment decisions about my 401(k) retirement account.” Forty-four percent disagreed with this statement and the rest were indifferent.

In addition, 75% of participants surveyed said they enjoy learning about investing and 68% said they closely monitor the value of their 401(k) accounts. More than half of those surveyed agreed that “I am willing to take on substantial risk if it could mean a higher return.”

“This research shows us several things – first, that by emphasizing a retirement account balance instead of the amount necessary to retire in comfort, we have all been putting the emphasis on the wrong idea,’ said Don Salama, senior managing director of NYLIM Retirement Plan Services, in the news release. “Many of these participants monitor their investments carefully, are prepared to take some risk and feel they’re making good decisions, but are still worried they won’t have enough for the long haul.’

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