Study Offers Suggestions for Improving Americans’ Retirement Confidence

Sixty-eight percent of people that Mercer surveyed in 12 countries said that they plan to continue working into their later years or never retire at all, according to Mercer’s report, “Healthy, Wealthy and Work-Wise: The New Imperatives for Financial Security.” That may not be possible for many people, however, as only 39% characterized their current health as excellent or very good.

Only 26% of people are confident they can save enough for retirement, and a mere 33% have tried to calculate their savings needs in retirement.

It appears that employers can play an integral role in helping people plan better for retirement, Mercer says, since 79% of people say they trust their employers to give sound, independent advice on planning, saving and investing. “Eighty-six percent of employees say that if their employer improved benefits or added access to an investment plan, it would have a positive impact on them at work, resulting in higher job satisfaction and greater commitment to the organization,” Mercer says.

Eighty-five percent of respondents said they would like to be offered easy-to-use online financial tools. This jumps to 93% for Millennials.

As far as the challenges various groups will face, Mercer says for Millennials, it will be the fact they change jobs frequently and will live longer than earlier generations. “Women face a gender gap in salary inequality, career continuity and access to employer-sponsored retirement plans,” Mercer says.

Governments can raise the retirement age, thus encouraging more employers to retain older workers on their staff, Mercer says. They could also make retirement savings mandatory and allow retirement plans to move at least part of people’s portfolios into retirement income products. Employers need to make retirement savings more engaging by using technology to allow people to access personalized information, Mercer says.

While 68% of participants in all the nations surveyed plan to continue working or never retire, this is true for 71% of participants in the U.S. study. Thirty percent of the U.S. workers surveyed think they will live to 90 or older. While only 39% of people in all nations say they have excellent or very good health, this is true for 59% of Americans.

Ninety-one percent of Americans say they take ownership of their financial security, either through personal retirement savings accounts or employer plans. This is higher than the global average of 81% who say they take ownership of their financial security. Ninety percent of Americans say having a retirement plan or pension at work is important. The Mercer survey found that Americans are confident they will be able to maintain their quality of life in retirement and are taking steps to make this happen, such as spending less, downsizing their lifestyle and working longer or part time.

Asked who they trust for financial advice, Americans are most likely to say their partner (91%) followed by family (87%), employer (85%), financial tools (69%), advisers (61%) and, lastly, government (53%).

Sixty-five percent of adults in the global study say they do not feel financially secure. Comparatively, only 38% of Americans do not feel financially secure, but 49% say they need financial security to retire well. Nearly one-third, 64%, of Americans expect to maintain a desired quality of life in retirement, and 89% are willing to make trade-offs to ensure a better life in retirement.

Sixty-three percent of Americans feel financially stressed, only 31% think they will have saved enough by the time they reach retirement, and 40% are stressed due to not saving enough for retirement. Additionally, only 35% of Americans are confident they will be able to afford to live out the rest of their lives. Americans think they will spend between 15 and 20 years in retirement.

The global survey found that 64% of people are saving for retirement; in the U.S., this is 58%. Only 29% of Americans have calculated how much they will need for retirement, and a mere 31% are confident they will have saved enough by retirement.

Among the 51% of Americans who have calculated their retirement savings, only 17% have used an online retirement savings calculator. Thirteen percent have used a savings application, and 27% have sought out the help of an adviser.

Mercer suggests that employers auto enroll participants into their retirement plans and select target-date funds that take people through retirement. “Modeling on the physical fitness revolution, creating a revolution in financial fitness combined with providing greater support to individuals in making sound saving and investment choices will go a long way toward closing the long-term savings gap,” Mercer says.

The U.S. findings of Mercer’s “Healthy, Weathy and Work-Wise” report can be downloaded here.