April 14, 2008
Courrier-Journal.com
More Americans are feeling uneasy about their golden years. A new survey found that rising health-care costs and a shaky economy have consumers worried about saving enough to keep them comfortable in retirement.
The Employee Benefit Research Institute’s annual survey showed the weakest worker confidence in seven years with just 61 percent saying they were “very confident” or “somewhat confident” of having enough money for retirement. That was down from 70 percent in 2007 and the poorest showing since 63 percent in 2001, when the economy was in recession.
The percentage of workers who put themselves in the “very confident” category dropped to 18 percent this year from 27 percent last year. The 9 percentage point drop was the largest in the survey’s 18-year history, the institute said.
Confidence among already retired workers also fell, with just 29 percent saying this year they were “very confident” they had enough for a comfortable retirement, down from 41 percent in 2007, the Washington, D.C., nonprofit group said.
Temple University business professor Jack VanDerhei, a co-author of the study, said workers and retirees were reacting to the many things currently hurting personal finances, from rising gas prices to the decline in home values and the drop in portfolio balances. All have led to reduced consumer spending, which may have pushed the U.S. economy into recession.
“And, I think, more workers are beginning to factor in all the various information they’ve been given, especially the need for additional retirement funds just for the health-care component,” VanDerhei said.
The study again showed that most Americans are trying to save for their later years.
Some 72 percent of workers said they have saved some money toward retirement, while 64 percent are currently saving. Still, 22 percent of workers said they have no savings of any kind.
Employees seek more advice in the workplace
Staying with that theme, another survey found that workers are increasingly looking for their employers to give them access to financial planning and retirement advice.
MetLife’s annual employee benefits trend survey found that 49 percent of workers in 2007 were interested in getting advice at their workplace about saving for retirement, up from 38 percent in 2006. Those expressing interest in overall financial planning rose to 44 percent from 30 percent, the study found.
Bill Mullaney, president of MetLife’s institutional business, said the results reflect, in part, the aging of the work force and a greater interest by older workers in retirement preparedness.
Workers also expressed an interest in company-offered programs such as life and disability insurance because they “believe the employers do due diligence to secure arrangements that are, perhaps, more favorable than they (workers) could get on their own,” he said.
N.J. lawmakers agree to caregiver legislation
New Jersey moved last week to become the third state to require companies to offer six weeks of paid leave to workers wishing to care for a new child or sick relative.
The state’s Senate voted 21-15 to approve the bill that would offer up to six weeks paid leave. The Assembly approved the Democratic plan last month and Democratic Gov. Jon Corzine said he planned to sign it.
“People are served well by having their families near them and supportive of them in times of great stress,” said Corzine, noting that his children helped him recover from a near-fatal car accident a year ago.
Under the plan, which is backed heavily by organized labor and opposed by Republicans and business groups, parents could take paid leave any time in the first year after a child’s birth or adoption.
The program would be paid for through a payroll deduction that legislative officials estimate would cost workers $33 per year. Workers who take leave would get two-thirds of their salary, up to $524 per week.
– From wire reports