Like higher education employees, public service workers struggle to save for retirement, finds new research out today from MissionSquare Research Institute.
The institute’s latest national survey of public service employees finds that a growing number are concerned over whether they’ll outlive their retirement savings. According to the research, 81% are concerned they won’t have enough money to last throughout retirement, and 78% doubt they’ll have enough to live comfortably during their golden years. Only 9% describe the benefits provided through their employer’s plan as “very sufficient” in meeting their retirement needs.
Others are concerned they won’t be able to retire on time (73%) while some are unsure whether they’ll have sufficient emergency savings (73%).
Despite the uncertainty, public sector respondents to MissionSquare’s survey believe their retirement benefits are better than those offered in the private sector. Another 60% admit that their retirement benefits make them inclined to stay in their job, and 61% believe that other benefits like healthcare, insurance, and time off also contribute to job retention.
MissionSquare says employers can take multiple steps to bolster retirement readiness and increase confidence. According to the findings, 78% suggest higher wages would improve retirement readiness, 54% advocate for better retirement benefits like employer matches, and 50% recommend offering better healthcare benefits in retirement.
Others believe they would benefit for financial education and planning, like understanding how much to save for retirement (65%), how an employer’s retirement plan is taxed (57%), how to identify the benefits most relevant at various stages in a career (53%), vesting schedules (48%), how their defined contribution (DC) plan works, and how their pension plan works (45%).
Past findings have shown that respondents value financial guidance and its impact to their retirement. A July study by Corebridge Financial found that 78% of respondents who work with a financial professional say they feel more confident to retire.
“Our research underscores the need for more financial education and planning resources,” said Zhikun Liu, vice president and head of MissionSquare Research Institute. “Public employees vary widely in their approaches to managing their retirement savings, from seeking advice from friends to performing their own calculations. The process of decumulation of retirement assets carries significant implications, and mistakes can dramatically impact whether employees spend down their nest egg prematurely.”
The findings also come as the industry celebrates National Retirement Security Month in October. “National Retirement Security Month is an important time to reflect on how we can strengthen the financial security of all Americans,” said Andre Robinson, MissionSquare Retirement chief executive officer and president. “These survey results clearly indicate that there is much work to be done in terms of shoring up financial security across the board. As a nation, we can and should do more to ensure everyone is best positioned for a secure retirement. If workers are worried about their finances, they can’t focus on their jobs. The good news is that our research points to practical solutions that can be implemented to bolster retirement readiness – from expanding auto-enrollment to increasing financial planning and education resources.”
The survey, conducted by MissionSquare Research Institute in collaboration with Greenwald Research, reached a nationally representative sample of 1,009 state and local government workers between September 12 and October 4.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
