Most Employees Unprepared For Retirement [Infographic]
While workers prize their employer-sponsored retirement plans, few feel that they're prepared to retire. Changes to traditional pensions, known as defined-benefit plans, is one reason U.S. workers worry about they're ability to retire, according the latest "What's Working Survey" from the consulting firm, Mercer.
During the recent recession many employers froze their traditional pension plans, waiting for the economic gloom to subside. Others long ago traded in traditional pension schemes instead for 401(k) or similar plans, also known as defined-contribution plans, which rely heavily on stock-market gains to pad employee savings.
Those changes combined with weak performance on world stock markets in recent years have fueled concern among workers about their retirement, says Arthur Noonan, partner in Mercer's retirement, risk and finance business.
Add to those issues the large number of baby boomers quickly approaching retirement age, and increased media attention to retirement issues and possible cuts to Social Security, and it's no wonder many American workers are feeling more vulnerable.
"People's sense of security has been shaken," Noonan says.
The feeling of insecurity is no doubt much more acute for employees of smaller business, many of which can't afford to offer their workers a retirement savings option as part of their benefits package.
According to Reuters, only about a fifth of small-business owners say that they offer self-funded retirement plans, such as 401(k) plans, for their employees.
For more about how workers view their retirement prospects, check out the infographic below.
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