Retirement preparedness unchanged since 2011

Additionally, just 23 percent of workers and 28 percent of retirees surveyed report they have obtained investment advice from a professional financial advisor who was paid through fees or commissions. Of these workers, 27 percent followed all of the advice, but more disregarded some and followed most (41 percent) or some (27 percent) of the advice.

The report reveals also that 63 percent of workers report they and/or their spouse have saved for retirement. But just over a quarter of these workers (28 percent) say they have less than $1,000 in savings. In total, 57 percent report that the total value of their household savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.

When asked to name the most pressing financial issue facing Americans today, both workers and retirees are most likely to identify job uncertainty (30 percent of workers and 27 percent of retirees) and making ends meet (12 percent each). Just two percent of workers and four percent of retirees identify saving or planning for retirement as the most pressing financial issue.

Worker confidence in the affordability of retirement continues to decline. The survey observes an increase in the percentage of workers who are not confident in their ability to pay for basic expenses (16 percent, up from 12 percent in 2011, but statistically equivalent to 13 percent in 2012), medical expenses (29 percent, up from 24 percent in 2012) and long-term care expenses (39 percent, up from 34 percent in 2012).

Cost of living and day-to-day expenses head the list of reasons why workers do not contribute (or contribute more) to their employer’s plan, with 41 percent of eligible workers citing these factors. Just 19 percent of the respondents indicate they would cancel the contribution if enrolled at a three percent deferral rate, while 29 percent would cancel at a 6 percent deferral rate. The survey notes that reaction is “mixed” to a proposal requiring that half the balance in an employer-sponsored retirement saving plan be automatically converted to an annuity at retirement. Thirty percent of plan participants would strongly oppose the proposal, and an additional 16 percent would somewhat oppose it. Just over one in ten (11 percent) would strongly favor the proposal and 35 percent would somewhat favor it.