About two-thirds of Americans believe that pensions are better than 401k accounts in terms of ensuring retirement security, and three in four would be interested in participating in a state-sponsored retirement plan if it were offered.
These are among the takeaways of note from a wide-ranging new study by the (admittedly pension-focused) National Institute on Retirement Security (NIRS) and Greenwald & Associates.
The findings, which also showed Democrats, Republicans and Independents share serious concerns about the prospects of a retirement crisis, were discussed Tuesday, Feb. 26 at the NIRS annual retirement policy conference in Washington, D.C.
Despite deep political polarization, the new research shows Americans are united in their concern about retirement. In overwhelming numbers, Americans say the nation faces a retirement crisis, with Democrats at 80 percent, Republicans at 75 percent, and Independents at 75 percent.
The study finds Americans see government playing an important role in helping workers prepare for retirement, but lawmakers in Washington aren’t delivering results–and the new tax law has not helped.
Only 34 percent say the tax overhaul passed last year is helping on the retirement front, 84 percent say leaders in Washington have no idea how hard it is to prepare for retirement, and 80 percent say the government should ease the way for employers to offer pensions.
“If the new Congress is serious about addressing Americans’ retirement anxiety, a bold first step would be strengthen Social Security and make it easier for companies to offer pensions,” says Diane Oakley, NIRS executive director. “A majority of Americans agree that government needs to increase Social Security contributions from both employers and workers, and 76 percent say that the disappearance of pensions is killing the American dream.”
Among the key findings in the research:
- Americans are highly positive on the role of pensions in providing retirement security and see these retirement plans as better than 401k plans. More than three-fourths of Americans have a favorable view of defined benefit pensions. Some 64 percent say pensions are better than 401k accounts in terms of ensuring retirement security, including 71% of Millennials. And, 77 percent say those with pensions are likely to feel more comfortable retiring than those relying on individual savings. Across party lines, Americans have highly favorable views about pensions (Democrats at 80 percent, Republicans at 81 and Independents at 75 percent).
- There is strong support for pension plans for state and local workers, and Americans see these retirement plans as a tool to recruit and retain public workers. Some 82 percent say police officers & firefighters deserve a pension because they have risky jobs, while 74 percent say teachers deserve pensions to compensate for low pay. The overwhelming majority (79 percent) say all workers, not just state and local workers, should have a pension. Some 83 percent say pensions are a good way to recruit state and local workers.
- In overwhelming numbers, Americans are worried about their ability to attain and sustain financial security in their older years. Three-fourths of Americans say the nation faces a retirement crisis. Some 70 percent say the average worker cannot save enough on their own to guarantee a secure retirement. And 65 percent say it’s likely they will have to work past retirement age to have enough money to retire.
- In contrast to the sentiment about Washington, D.C., efforts by state lawmakers to expand access to retirement accounts for all workers is widely supported. Americans overwhelmingly agree (71 percent) that state-based retirement plans are a good idea, and 74 percent of Americans say they would participate in state retirement plans. Americans view key features of state-based retirement plans as highly favorable, especially portability (90 percent), monthly checks (90 percent) and higher returns (86 percent).
- Millennials are the most concerned about financial security in retirement, and are more willing than other generations to save more. Millennials are the most pessimistic (72 percent) generation about achieving financial security in retirement. Millennials are the generation most likely to believe they will have to work past normal retirement age (77 percent) to have a secure retirement. More than half of Millennials are willing to save 5 percent or more to help ensure a financially secure retirement, which is more than double the response for that level of savings from Boomers and Gen X.
The online poll of 1,250 individuals age 25 and older was conducted Jan. 7-16 by Greenwald & Associates for NIRS, a Washington D.C.-based nonprofit research and education organization. NIRS’ research program focuses on the role and value of defined benefit pension plans for employers, employees, and the public at large, while also conducting research on policy approaches and other innovative strategies to expand broad-based retirement security.
Download a summary of the research here.