Most workers are worried that their retirement savings won’t last the rest of their life. Only 40 percent of current workers say they will have enough money to finance a 25-year of retirement, according to a new Towers Watson survey of 3,099 full time employees in the private sector. Just 62 percent of the survey respondents think their retirement savings will last even 15 years.
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“Despite some signs of an economic recovery, many employees remain apprehensive about the future of their retirement,” says Kevin Wagner, a senior retirement consultant at Towers Watson. “The financial crisis hit employees hard and eroded both their savings and confidence in being able to retire comfortably.”
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Employees with a traditional pension are considerably more likely to feel satisfied with their financial situation than those with only a 401(k) plan. Over half (52 percent) of workers with a traditional pension are confident that they will have enough resources for a comfortable 25-year retirement, compared to a third (34 percent) of employees with a 401(k) or similar type of retirement account.
However, even employees with pensions are apprehensive about the benefits continuing to accrue until they retire. Many workers with pensions are concerned that benefits will be reduced in the future (45 percent), eliminated altogether (35 percent), or that the company will be unable to pay out some of the benefits they have already earned (23 percent). Pension worries among employees age 50 and older have declined somewhat over the past year. But younger workers with traditional pensions are growing increasingly anxious about losing their retirement benefits, with 68 percent of workers under 40 fearing retirement benefit cuts.
Over half of workers (55 percent) say their retirement savings has declined significantly over the past 2 years. Older and high income workers have experienced the biggest losses.