Data & Research February 28, 2017

Americans in Agreement on Efforts to Improve Retirement Security

An overwhelming majority of Americans (85%) say leaders in Washington do not understand how hard it is to prepare for retirement, a survey finds.
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While America is facing a deep political divide on many policy issues right now, both Democrats and Republicans are concerned about their ability to achieve a secure retirement.

A study, “Retirement Security 2017: America’s View of the Retirement Crisis and Solutions,” published by the National Institute on Retirement (NIRS) and based on a poll of 800 Americans conducted by Greenwald & Associates finds 76% of Americans are concerned about their ability to achieve a secure retirement, with that level of worry at 78% for Democrats and 76% for Republicans. Eighty-eight percent of Americans agree that the nation faces a retirement crisis, and the concern is high across party lines.

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The research also finds 82% of Americans have a favorable view of pensions. Eighty-five percent say all workers should have access to a pension plan so they can be independent and self-reliant in retirement. More than three-fourths of Americans (77%) say the disappearance of pensions has made it harder to achieve the American Dream, and 71% of respondents say pensions do more to help workers achieve a secure retirement as compared to 401(k) plans. Nearly two-thirds (65%) say pensions are safer than 401(k) plans.

Americans strongly support pensions for police officers and firefighters (90%), and teachers (81%). Eighty-one percent say these benefits are deserved because public employees help finance the cost from every paycheck.

An overwhelming majority of Americans (85%) say leaders in Washington do not understand how hard it is to prepare for retirement. Similarly, 86% say leaders in Washington need to give a higher priority to ensuring that Americans have a secure retirement. In terms of solutions, 82% of Americans say government should make it easier for employers to offer pensions.

Action at the state level to expand access to retirement savings gets a favorable nod; Americans believe that state-sponsored retirement savings programs for workers not covered by their employers’ plans are a good idea (75%), and 81% say they would consider participating in a state plan. However, lawmakers are making attempts to thwart state-sponsored plan efforts.

Finally, the research found 76% of respondents say it is a mistake to cut government spending to reduce Social Security benefits for current retirees. When it comes to adjusting benefits for future generations, 73% oppose cutting government spending that reduces Social Security benefits.

Data & Research February 28, 2017

Millennials Fret Their Student Debt Load

More than half of all young workers worry about repaying their student debt “either all the time or often,” according to a new survey by American Student Assistance. 
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The vast majority of younger employees (90%) say they would commit to an employer for a five year period in return for real help paying down their student loans, a new survey from American Student Assistance (ASA) shows.

ASA describes itself as a “private nonprofit dedicated to eliminating finance as a barrier to education and the dreams education enables.” According to the advocacy group, employers should consider student loan repayment assistance alongside other employee benefits such as health insurance and retirement savings—and in fact for many Millennials student debt assistance is a higher priority than more traditional benefits.

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Findings from the “Young Workers and Student Debt Survey” show real challenges faced by young workers with student debt. This is driving “strong demand for benefits such as financial literacy, one-on-one counseling, sign-on bonuses and student loan repayment,” ASA reports.

“Young workers feel highly stressed out as a result of the burden of student debt and that debt clearly impacts their health and productivity in the workplace,” observes Kevin Fudge, director of consumer advocacy and ombudsman at ASA. “Employers should realize that in order to retain the brightest young talent and demonstrate their commitment to employee well-being, they need to provide concrete and straightforward solutions to help alleviate this burden.”

At a high level, student loan debt is “negatively affecting young workers’ focus, well-being and retirement planning as well as delaying their pursuit of further higher education.”

“More than three out of out five young workers say their priority is paying off student loans and not contributing to a 401(k) or other retirement plan,” ASA warns. “The research also reveals a gap between human resource managers and their young workforce as to the perceived impact of student loans and the solutions that young workers are seeking in exchange for their loyalty.”

NEXT: Dealing with debt as a saver 

Other key findings from the ASA research show more than half with student debt worry about repaying their loan either all the time (26%) or often (30%). At the same time 40% report that “worrying about their student loans” has impacted their physical health, and 61% have considered getting a second job to help pay off their student loans.

Part of the challenge is that most (63%) young workers report that they don’t have anyone to turn to for help with regard to paying off their student loans. This is no doubt exasperated by the fact that 75% of human resources professionals report that their company “does not offer any guidance or assistance regarding student loans.”

It’s no surprise that the struggle to meet student loan debt payments is eating into the effort to get an early jump on saving for retirement. More than half (54%) of young workers report that “right now, paying off student loans comes first,” and they will put off saving for retirement until later.

Despite these sobering statistics, the report does draw some more positive conclusions—most notably suggesting that employers have some real opportunity to build out student loan assistance programs that can serve as powerful recruiting and retaining tools.  

“The vast majority (86%) say they would commit to an employer for five years if the company helped pay back their student loans,” ASA reports. “At the same time, 93% of young workers would take advantage of a sign-on bonus targeted at paying back student loans; 92% would take advantage of a match for student loan repayments similar to a 401(k) match; 89% would take advantage of overall long-term financial planning; and 79% would take advantage of free access to a student debt loan counselor.”

Additional research and resources are available at www.asa.org. 

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