New data from the Principal Financial Group’s Financial Well-Being Index shows that current retirees are even less realistic, with 73% percent saying they’ll need less than 80% percent of their working income to live throughout retirement years.
Many American workers are apparently in need of financial planning for retirement financing. When asked about financial planning checkups, 41% of retirees and 40% of workers indicated they have never had one. Two-thirds of both workers (66%) and retirees (67%) indicated they have not had a financial analysis conducted on any of several financial planning areas in the past three years, including retirement savings, life insurance, and savings goals. According to the a press announcement from Principal, for the first time since 2004, half of workers (49%) listed their long-term financial future as being more important than their current job security (39%).
Health care costs are among the largest expense for many retirees, Houston said, and retiree health care benefits are causing increasing concern for both retirees and employees. According to the survey, half of workers said their current or past employer does not offer retiree health care benefits.
Surprisingly, one-third of workers (33%) and 28% of retirees said they have no safety net in place if their employer-sponsored retiree health care benefits are eliminated. Many workers (37%) and retirees (30%) indicated they have a savings account should they lose their retiree health care benefits, but an alarming number (36% of workers and 32% of retirees) would have to dip into their retirement nest egg.
The study was conducted by Harris Interactive online among employees (aged 18-plus) of small and midsized U.S. businesses (firm size 10 – 1,000 employees). To compare responses, Harris Interactive also interviewed a group of retirees. Harris Interactive conducted The Principal Financial Well-Being Index survey of 1,137 employees and 548 retirees from May 1 through May 7, 2007, using the Harris Poll Online.