Retirement tops the list of savings objectives among respondents to a survey from MassMutual and conducted by Brightwork Partners. Overall, “saving enough for retirement” surpassed “keeping up with monthly expenses” as the biggest financial worry—up significantly to 24% from 18% in 2011. It was also cited as a major savings objective by 63% of participants, 21 points higher than the second most-cited objective of “paying down debt.”
Participants in general are saving more, with the average retirement savings rate among those surveyed at 10.5%, up from 9% two years ago.
Only 28% of respondents currently have, or have had in the past five years, a relationship with a personal financial adviser. However, many more men have one (31%) compared to women (24%), and the gender difference has increased since 2011 when 30% of men had an adviser versus 27% of women. Retirement as a major savings objective rated 20 points higher among participants with a professional financial adviser than for those without one—77% versus 57%.
Not only are men more likely to have a professional adviser, they are more confident than women in virtually every aspect of retirement planning and defined contribution (DC) investment decisions. Higher adviser use may contribute to the fact that men pay more attention than do women to fund performance (30% vs. 22%), income in retirement (26% vs. 18%) and asset allocation (25% vs. 15%).
Although the retirement plan provider is still cited as the "most important source of investment information" by participants, professional advisers have displaced plan sponsors this year as the second most important source of this information. Of note, satisfaction with information from professional advisers is up sharply (47% "very satisfied" in 2013 vs. 25% in 2011), while satisfaction with information from plan sponsors is down sharply (10% in 2013 vs. 30% two years ago).
The proportion of workers younger than 50 who are considering delaying retirement is up five points, while the proportion of workers age 50 and older who are considering delaying retirement is down five points. Thirty-seven percent of respondents have considered delaying retirement beyond their original target date, and that percentage jumps to almost 50% for people currently age 50 or older.
In addition, 63% of people expect to work at least part-time in retirement, and 54% expect they will need to reduce their standard of living. While women still expect to work to a somewhat older age, their average expected retirement age has come down slightly to age 66.4 (vs. 66.9 in 2011). The average expected retirement age for men has gone up to 66 compared to age 65.6 two years ago.
The nationwide survey was conducted online between February 18 and March 11, 2013, and included 2,081 defined contribution plan participants who are eligible to participate in a 401(k), 403(b), 457 or similar workplace retirement plan.