A Transamerica news release about its new study of the effects of educational level on one’s retirement confidence and readiness said of workers with access to a plan, those with only a high school education have a lower participation rate (63%) than those with some form of higher education (84% with a college degree, and 87% with at least some post graduate education). Those with only a high school education also contribute a smaller percentage of their pay (5% median) compared to those with a college degree (8% median).
According to Transamerica, workers with lower levels of educational attainment are also significantly less confident in their ability to fully retire with a comfortable lifestyle. Just 40% of high school graduates without any college education are confident in their ability to retire, compared to 53% of college graduates and 64% who have pursued a post graduate education.
While most workers agree that they could work until age 65 and not save enough to meet their retirement needs, three-quarters of high school graduates with no college education agree with this sentiment compared to just over 60% of college graduates. Additionally, nearly half of high school graduates without any college education (48%) plan to work past age 70 or not retire at all.
When American workers reach their retirement date, more than half with a college degree expect their 401(k), 403(b), and IRAs to be their primary source of income in retirement – compared to over one-third of workers with only a high school diploma who expect to rely on Social Security, the news release said.
Nearly one-third of those with only a high school diploma cite that they do not rely on any source of information for retirement planning and investing—the most common response among that demographic. By comparison, those with a college degree more frequently rely on a wider range of available resources like financial Web sites (42%), financial planners or brokers (33%), and newspapers and magazines (27%).
The 11th Annual Transamerica Retirement Survey was conducted among nearly 3,600 American workers. The report is at http://www.transamericacenter.org/resources/TCRS11thEducationalMattersFinal.pdf.