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Women, Higher Income Feeling Better About Retirement Prospects

American workers are feeling better about their retirement prospects, with most of the (modest) improvement registered among higher-income individuals and women, a new survey suggests.

According to “the State of U.S. Employee Retirement Preparedness” by Financial Finesse, nearly 1 in 5 employees that completed a financial wellness assessment during the year reported being on track to reach their income-replacement goals in retirement. Twenty-eight percent of employees reporting $100,000 or more in household income are confident they are on track to achieve their income-replacement goals, up from 23% in 2012. However, all other income cohorts experienced little or no change in retirement confidence.

Additionally, 17% of women are now confident they are on track to achieve their income-replacement goals, up from 13% in 2012. However, women are still trailing men in this area, as 26% of men reported being on track (unchanged from 2012).

The report also noted that men age 55 and older earning $100,000 plus are more than four times as likely to feel confident they are on track for retirement as women under 45 earning less than $60,000.

There were some other signs of improvement in preparations:

• 54% have used a financial calculator (up from 40% initially).
• 30% are confident they are on track (up from 17% initially).
• 47% are confident in their investment allocation (up from 31% initially).

Moreover, of the employees that did not indicate they were on track to reach their goals, three in every four have not run a retirement projection.
In 2013, 83% of Millennials that completed a financial wellness assessment reported contributing to their employer-sponsored retirement plan, the same level as reported for all of 2012.

Households in the lowest income quintile saw a drop in the retirement plan participation rate of employees from households making less than $60,000 a year, from 85% in 2012 to 82% in 2013. Only about a third of this group used a retirement calculator to run a retirement projection, and that was down from 36% in 2012.

With stats like that, it’s not surprising that only one in ten reported being on track to reach their income-replacement goals, the same level as 2012.