Workers restructure retirement expectations

American workers are more retirement-minded than they were a year ago, according to the 10th Annual Retirement Survey, an online study conducted by Harris Interactive on behalf of Transamerica Center for Retirement Studies.

Market volatility and shrinking retirement savings accounts have motivated workers to re-establish expectations about their financial security later in life.

Almost 30 percent of respondents expect to work longer and retire later than they did 12 months ago. More than one-third now expect to work past age 70, and 15 percent never plan to retire.

Only 38 percent of respondents agree they are building an adequate nest egg, and 68 percent admit they do not know as much as they should about retirement planning. Less than 10 percent say they know a "great deal" about asset allocation principles related to retirement investing. Seventeen percent say they're not sure how their retirement savings are invested.

But they are willing to learn, according to the survey. About 30 percent of respondents are increasingly turning to sources of retirement-related information, including financial Web sites and retirement plan-provider sites.

Despite decreased employer matches to 401(k)s, workers remain committed to saving for retirement, according to the survey. Ninety-one percent of workers surveyed say they value an employer-sponsored retirement plan, and the plan participation rate remains high at 78 percent. In the last 12 months, only 6 percent report having taken out a loan and only 3 percent indicate they had taken a hardship withdrawal from their accounts.

When workers were asked what they expect to be their primary source of income to cover living expenses when they retire, those who are offered an employer-sponsored 401(k) or similar plan most frequently cited 401(k), 403(b) accounts and IRAs (51 percent). Those workers who are not offered a 401(k) or similar plan most frequently expect to rely on Social Security (32 percent).

Workers who are offered a retirement plan are also more likely to save for retirement outside of work (68 percent) compared to those who are not offered a plan (50 percent). Among survey respondents who are currently not offered a retirement plan, 59 percent say they would be likely to leave their current employer for a nearly identical job with a similar employer, if that new employer offered a retirement plan.

"Employer-sponsored retirement plans, including 401(k) and similar plans, have proven to be highly effective in encouraging workers to save for retirement on a consistent basis," said Catherine Collinson, president of The Center. "As recent financial markets have shown, retirement savings - like most savings and investment programs - have risks. However, when the markets improve, people who have continued to save should eventually enjoy a recovery in their account values."

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