Most employees are only moderately motivated to save for retirement, according to research released May 30 by Prudential. Although about 90% of employees feel contributing to a retirement plan is important, nearly 60% feel they won’t ever be able to save enough for a comfortable retirement.
Prudential’s Lifetime Saver Commitment Profile is an index to help employers identify employees’ level of motivation and satisfaction with their retirement plan. The index is based on responses from 690 workers who took an online survey last summer. Respondents were between 21 and 64 years old, and all were eligible to participate in their employer’s retirement plan. Respondents with a score between 75 and 100 were rated as highly motivated. Those who scored under 49 were rated less motivated.
Two-thirds of respondents scored between 59 and 74 on the index, and just 13% scored as highly motivated. Unsurprisingly, older respondents were more likely to score above 75. Just 7% of respondents between 21 and 29 were considered highly motivated, compared with 18% of those between 51 and 64.
Prudential found that in addition to older workers, the highly motivated group also had a higher proportion of women and was more educated. They also had more investable assets and less debt.
“Our research revealed that the more motivated employees, who include a higher proportion of women, older workers and the well-educated, share a proactive approach to retirement planning and have more savings, while many other employees still need guidance,” George Castineiras, senior vice president of Total Retirement Solutions for Prudential, said in a statement. “Employers can assist their less-motivated employees by simplifying retirement workplace plans and offering solutions that are easier to understand and focus on employees’ individual needs.”
The survey found 40% of respondents in the highly motivated group expected to contribute between $2,500 and $9,999 by the end of 2012, and 36% expected to contribute more than $10,000. They also have more saved in non-employer-sponsored accounts. The report found the median balance in retirement savings accounts in 2012 was $7,500 for highly motivated respondents, compared with $1,750 for moderately and less motivated respondents. The median balance in highly motivated respondents’ employer sponsored plans was $62,500, compared with $37,500 for those with lower motivation to save.