A recent survey of public sector employees found that a majority are concerned they haven’t received the level of guidance needed to prepare for retirement.
A report by MissionSquare Research Institute found that 60% of 1,009 full-time state and local government employees, including those in education, public safety, and health and human services, say they need support in understanding the amount needed to allocate for the long-term.
Specifically, workers want help with overall retirement readiness, understanding sources of income in retirement, financial planning education, and retirement spending strategies.
The report, co-authored by Zhikun Liu, Ph.D., CFP, vice president and head of MissionSquare Research Institute at MissionSquare Retirement, and Thomas Korankye, Ph.D., CFP, assistant professor of Personal and Family Financial Planning at the University of Arizona, found that over 15% of public sector employees and 23% of those in the education sector do not have a well-defined retirement spending strategy.
“While increased compensation is certainly a driver of retirement readiness, financial education remains foundational,” said Liu. “Empowering employees with knowledge about how much to save and where that money should come from is vital to helping them feel secure about their future.”
Most expect Social Security benefits, government pensions, and personal savings to be their sources of retirement income. Specifically, Social Security is expected by 72% in public safety, 75% in education, 78% in health and human services, and 82% in the “other” sector.
When asked about the specific areas of financial planning they need the most help with, 60% listed determining how much to save for retirement; 54% said identifying which benefits are most relevant to their career stage; and 50% want guidance in understanding how employer-sponsored retirement plans are taxed.
Others listed needing help from a financial advisor, employer, or retirement plan provider to manage retirement withdrawals, while some would rather figure it out themselves.
Moving forward, Liu recommends policy makers, along with employers and financial professionals, to work towards providing financial guidance and policy solutions tailored to public sector workers.
“These individuals dedicate their careers to serving our communities, and they deserve access to the resources necessary for a financially secure retirement,” he said.
SEE ALSO:
Public Sector Workers Lack Confidence in Retirement Savings
NAGDCA Offers Governance Guide for Public Sector DC Plans
Public Sector Employees Worried Over Retirement Readiness
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.