Benefits November 29, 2011

Running Out of Money Top Retirement Concern Among Americans

November 29, 2011 (PLANSPONSOR.com) – Thirty-one percent of Americans say running out of money is their top concern in retirement, according to the 2011 Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey. 
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The survey also found 47% of respondents would keep working if they were unable to retire as planned.  The next most pressing retirement concern was healthcare experiences (27%) and changes to Social Security that could lead to a reduction or delay in benefits (15%).

Top concerns in retirement varied by age range. Among those 65 or older, medical expenses (29%) and Social Security (22%) topped the list of concerns, followed by running out of money (19%). More than three-quarters (78%) of 35-34-year-olds are concerned about managing their retirement income to meet retirement expenses. This percentage decreased, yet was still a majority for younger age groups: 25-to 34-year-olds at 68%, and 18- to 24-year-olds at 59%.

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Survey data also showed that while 41% of 35- to 44-year-old respondents are invested in a workplace retirement plan, one-third (34%) of respondents in that age group said they haven’t thought about their approach to employing different sources of retirement income, and less than a quarter (23%) currently work with a financial adviser.

A quarter (25%) of respondents between the ages of 18 and 24 plan to rely on Social Security as a primary means of income during retirement, and 26% believe a workplace retirement fund, such as a 401(k) or 403(b), will provide the most income during their retirement.

Other key findings from the survey included:

•  Respondents between the ages of 18 and 24 are almost as concerned with funding vacations and hobbies (12%) as they are with paying off their mortgage (15%) during retirement, though 60% said paying off their mortgage is a goal by the time they reach retirement.

•  Seventy-six percent of those 65 or older said they are now more concerned by investment volatility than they were prior to the 2008 recession, versus 62% of 18- to 24-year-olds.

•  Sixty-five percent of Americans ages 65 or older said they will have to work between one and 10 more years before being able to retire.

•  Forty-six percent of respondents between the ages of 18 and 24 said they believed it would take between 40 and 50 years before they could retire —taking them into their late 60s and early 70s.

The Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey was conducted online among a sample of 2,046 adults comprising 1,020 men and 1,026 women 18 years of age or older. The survey was administered between September 15-18 and 19-21, 2011 by ORC International's Online CARAVAN.

Benefits November 29, 2011

Smallest Employers See Highest Health Coverage Price Hikes

November 29, 2011 (PLANSPONSOR.com) – The November Employee Benefits Market Survey shows small, medium and large groups have faced significant price hikes for group healthcare coverage during the past six months.  
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The survey conducted by The Council of Insurance Agents and Brokers found small groups of 50 or fewer employees saw the largest hikes, with 39% receiving increases of 11%-20%, compared with 62% reporting increases in that range in the Council’s May 2011 survey. Thirty-five percent of small groups received smaller increases that ranged from 1%-10%, compared to 13% in the earlier survey. Ten percent of small groups received no changes or price decreases compared to 3% in the earlier study.

In medium-size groups with 51-500 employees, 69% experienced hikes in the range of 6%-15%, compared with 75% in the May survey. Sixteen percent experienced increases of 1%-5%, no change, or decreases, compared to 8% in the May 2011 survey. Large accounts of greater than 500 employees also saw some moderation in pricing. Fourteen percent experienced no change or price decreases compared to 5% in the May survey. For the majority (61%) of large accounts, prices rose in the range of 1%-10%. Prices rose more than 10% for one in 10 (9%) large accounts, compared to 21% which had increases of that magnitude in the May survey.

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Ninety-seven percent of respondents expressed some level of concern in regards to the impact of healthcare reform, with those very concerned registering at 51% in the November survey, while 46% said they were “somewhat concerned.” In the Council’s previous survey, 100% of responding group benefit consultants expressed some level of concern about the impact of PPACA on their business, with 59% being “very concerned.”

Group life insurance continued as an area of stability or savings for employers within the group benefits arena. For 15% of small accounts, renewal rates rose 1%-5%, but 51% reported no change, and renewals decreased for 13%. Twelve percent of medium accounts experienced rates increases of 1%-5%, while 53% saw no change, and 24% had renewal decreases. For large accounts, 8% saw renewal increases of 1%-5%, 39% saw no change, and 34% of large accounts saw decreases in group life rates.

Click here for survey results with charts.   

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