CONFIDENCE EBBS ON RETIREMENT PLANNING

New York - The vast majority of executives responsible for 401(k) plans at their companies are feeling less confident that employees are financially prepared for retirement, according to a recent survey by Deloitte.

Of the survey's 430 respondents, 84 percent said that only some or very few employees would be financially prepared for retirement.

The 401(k) plan sponsors in the survey view improving employees' financial planning for retirement as a top goal, similar to last year. This is the 11th Annual 401(k) Benchmarking Survey conducted by Deloitte, in conjunction with the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists.

"From this survey we've learned that for the past several years, Americans have not been saving and investing enough for retirement," said Deloitte Consulting LLP principal Stacy Sandler. "Rising health care costs and dropping 401(k) balances have taken their toll on employees. Those factors, combined with record levels of personal debt, high unemployment and low levels of personal savings, continue to paint a highly concerning picture of retirement readiness."

However, the retirement plan sponsors surveyed remain steadfast in their obligation to prepare employees for retirement. Sixty-four percent of the respondents said that they believe their responsibility includes taking an interest in whether employees are tracking towards a comfortable retirement.

To encourage retirement plan participants to make better use of their 401(k), 49 percent of the plan sponsors are offering features that automatically increase participants' contribution levels. However, 64 percent of the plan sponsors surveyed reported that fewer than 10 percent of participants take advantage of this opportunity.

Automatic enrollment of employees in 401(k) plans continues to grow, according to the survey, with 56 percent of 401(k) plans including an automatic enrollment feature, up 7 percent from 2010.

 

MEN AND WOMEN DO RETIREMENT DIFFERENTLY

Minneapolis - A new study by Ameriprise Financial and Harris Interactive found that men outpace women in planning for the financial aspects of retirement at a ratio of 77 percent to 72 percent, while women are more likely to say they have thought about what they would like to do during retirement.

Only 22 percent of Americans report confidence in reaching their retirement goals. Men are significantly more likely than women to express this confidence, 25 percent versus 19 percent.

Fifty-four percent of men reported setting aside money in their own investments, such as stocks and IRAs, compared to 46 percent of women. Men are also more likely than women to report that they've determined the amount of income they'll need in retirement, at a ratio of 31 percent to 20 percent. This additional financial preparation may be one reason why men are significantly more likely than women to say that they feel on track for retirement (41 percent compared to 34 percent) and express confidence in their overall financial future (22 percent compared to 16 percent).

Women are more likely to report that family and health take a prominent role in their planning. They are significantly more likely to say that they plan to spend more time with family during retirement (41 percent versus 34 percent) and that proximity to family is a very important factor in determining where they will retire (40 percent versus 27 percent). They are also more likely to place importance on their proximity to friends and other retirees (21 percent versus 13 percent).

Women also place greater emphasis on maintaining their health. More than half (54 percent) are making plans to ensure they stay healthy during retirement, compared to 48 percent of men. Women are also more likely to rate access to health care options and facilities as a very important factor to consider when deciding where to retire (38 percent versus 32 percent). Women are also more likely to say that they have spent time determining how they will rest and relax in retirement (25 percent versus 19 percent).

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access