“Survey responses indicate that the retirement-eligible employees in these companies had a rather low level of knowledge, a lack of confidence in their ability to make optimal retirement choices, and a strong desire for their employers to provide more formal pre-retirement planning programs”
A recent study indicates that many employees simply do not understand their important facts about retirement, Social Security, Medicare, and other programs that impact their retirement planning. This does not bode well for employees, or their employers. As many employees plan their golden years (and their projected retirement age) based on faulty information, employers may want to step up and offer additional education.
The study, conducted from 2008 to 2009 by North Carolina State University’s Robert Clark, Melinda Sandler Morrill and Steven G. Allen, concludes: “Survey responses indicate that the retirement-eligible employees in these companies had a rather low level of knowledge, a lack of confidence in their ability to make optimal retirement choices, and a strong desire for their employers to provide more formal pre-retirement planning programs.” The extent of the problem comes into focus with some choice data points used in a Wall Street Journal Online article about the study.
- In surveys about the details of company and national retirement programs, workers only got an average of 50% of the answers correct.
- Although almost everyone was aware of their pension, 56% were not aware of what percentage of their current salary that pension would be.
- Many were unsure of employment in retirement. A quarter didn’t plan on work, while 38% wanted to remain full or part time, but 37% didn’t know what they wanted to do or what they would have to do.
- Only 36% of respondents knew the company age for eligibility in the company pension, while 37% overestimated the age and 9% underestimated it
- Only 37% knew the normal Social Security retirement age (but to be fair, many did better with the early retirement and Medicare eligibility ages.)
If you would like to bring retirement planning education into your workplace, please contact our office. We would be happy to visit with you (or your employer) to design a workplace education program on Retirement Planning.