For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.
Data and Research June 2, 2016
Employees Willing to Pay More for Retirement Benefits
Nearly one-quarter of employees say they will have to work past age 70, but many of them may not be able to due to stress and health issues.
Reported by Rebecca Moore
Twenty-three percent of U.S. employees surveyed by Willis Towers Watson say they will have to work past age 70 to live comfortably in retirement.
Nearly one-third (32%) anticipate retiring later than previously planned, and another 5% don’t think they’ll ever be able to retire. According to the survey, while the average U.S. employee expects to retire at age 65, they admit there is a 50% chance of working to age 70.
Nearly eight in 10 workers indicate they will rely on their employer-sponsored retirement plan(s) as the primary vehicle they use to save for retirement. According to the survey, more than six in 10 (62%) respondents would be willing to pay more out of their paychecks for more generous retirement benefits; 63% would be willing to pay more for a certain benefit at the point of retirement.
“Employers should take this opportunity to personalize their real-time decision-making support and recalibrate default enrollment to close the gaps in employee understanding about savings amount required and costs in retirement,” says Shane Bartling, senior retirement consultant at Willis Towers Watson.
Many employees who expect to work longer may not be able to due to stress or health issues. Forty percent of employees expecting to retire after age 70 have high or above average stress levels, compared with 30% of those expecting to retire at 65. For those planning to retire after age 70, less than half (47%) say they are in very good health, while nearly two-thirds (63%) of those retiring at age 65 state they are in very good health.
The survey also found 40% of employees planning to work past 70 feel they are stuck in their jobs, compared with just one- quarter of those who expect to retire at 65 (28%) or before 65 (27%).
Twenty-four percent of employees younger than 30 believe they’ll retire in their 70s or later, increasing to 28% of those in their 30s and one-third (33%) of those in their 40s. The percentage of U.S. men age 65 or older who are working has grown from 15% in 2003 to 22% last year.
The Willis Towers Watson 2015 Global Benefits Attitudes Survey measured attitudes of more than 30,000 nongovernmental, private-sector employees in 19 countries. A total of 5,083 workers from the U.S. participated in the survey, which was conducted between June and August 2015.