Employees more optimistic about retirementReprints
Fewer employees are planning to delay their retirement due to inadequate savings or other financial issues, according to new survey data released on Tuesday by PricewaterhouseCoopers L.L.P.
Thirty-six percent of the 1,700 U.S. employees aged 21-72 polled in PwC's 2015 “Employee Financial Wellness Survey” said they intend to retire later than previously planned, compared with 40% in 2014 and 53% in 2012.
Among employees that are planning to postpone their retirement, 51% cited insufficient savings as the reason for the delay, down from 60% in 2012.
The percent of employees delaying their retirement due to a need to retain their health care benefits, having too much debt, depreciation of their retirement investments or ongoing dependent financial support has also decreased during the last four years. Meanwhile, the percent of employees planning a later retirement because they prefer to continue working has more than doubled, to 28% this year from 13% in 2012.
Overall, employees' confidence in their readiness to retire has increased steadily in every year since 2012, but was still well below 50% in 2015.
“As pension plans fast become outdated, employees are realizing that they face the burden of funding their retirement,” Kent Allison, national leader of PwC's employee financial education and wellness practice, said in a statement accompanying the survey results. “Still, employers need to help ensure that their workforce understands how to assemble enough savings to live comfortably in retirement.”
Not all of the survey's results were positive. Thirty-five percent of employees polled said they are likely to draw on their retirement accounts early to pay for non-retirement expenses, up from 27% in 2014.
Additionally, only 30% of employees indicated that their company offers personal financial planning assistance, down from 34% in 2014.
The survey also revealed that although 2015 saw slight increases in both the percent of employees who make regular contributions to a tax-favored health savings account and the percent of employees planning to use HSA funds to pay health care costs after they retire, both percentages were still far below optimal levels.
“We're seeing a rise in the promotion of health savings accounts as one solution,” Mr. Allison said. “But only one-third of employees contribute to an HSA, and far fewer of those contributing — 16% — plan to use the funds for future health care costs in retirement.”