Survey conducted by the Center for State and Local Government Excellence and TIAA-CREF Institute finds health care costs are a major source of concern.
WASHINGTON, D.C. and NEW YORK, July 26, 2012 – A new report released today by the Center for State and Local Government Excellence and the TIAA-CREF Institute finds that only 19 percent of full-time public sector workers are very confident in their retirement income prospects, with many expressing concern about the impact of rising health care costs on current savings.
The report – the 2012 Retirement Confidence Survey of the State and Local Government Workforce – surveyed more than 1,200 state and local government employees across the nation including public educators, police, and firefighters.
The study found that only 16 percent of teachers and 25 percent of police and firefighters are very confident they are saving the right amount for retirement. In addition, a full 57 percent of public sector workers expect to work longer than they would like and 72 percent expect to work for pay after retiring.
“Much has been written about the financial condition of pension plans and plan reform in the public sector, but little has been documented about public sector workers’ confidence, expectations, and behavior with respect to retirement planning and saving,” said Paul Yakoboski, senior economist with the TIAA-CREF Institute.
In particular, the survey indicates the rising cost of health care is a factor in the tepid expression of overall retirement confidence. Only 22 percent are very confident that they will have enough money to take care of medical expenses during retirement and two-thirds are not confident that Medicare will continue to provide benefits of equal value to those provided today.
“A large number of public employees have done little to save for out-of-pocket medical expenses in retirement, which is an area of concern,” said Joshua Franzel, Center for State and Local Government Excellence vice president of research and co-author of the report. “The survey found that this is the case for nearly half of police and firefighters and 63 percent of teachers. Health care costs, the future status of Medicare, and lack of personal health care savings contribute to workers’ anxiety about being ready for retirement.”
Download a summary of the research findings and the full survey results.
About the Study
To examine retirement planning and saving among full-time state and local government employees and their confidence in their retirement income prospects, Mathew Greenwald & Associates surveyed 1,251 individuals working in state and local government by telephone during January and February 2012. Of those surveyed, 1,151 were full-time employees and 100 were part-time; 501 were K–12 teachers; 139 were firefighters; 111 were police officers; and 500 were in other occupations. Responses were weighted to be representative of the aggregate public sector workforce.
About the Center for State and Local Government Excellence
The Center for State and Local Government Excellence helps state and local governments become knowledgeable and competitive employers so they can attract and retain a talented and committed workforce. The Center identifies best practices and conducts research on competitive employment practices, workforce development, pensions, retiree health security, and financial planning. The Center also brings state and local leaders together with respected researchers and features the latest demographic data on the aging workforce, research studies, and news on health care, recruitment, and succession planning on its website, www.slge.org.
About the TIAA-CREF Institute
The Institute is a preeminent thought leader in lifetime financial security, retirement planning and promoting organizational success with a focus on the higher education, K-12, medical, cultural and governmental communities. The mission of the TIAA-CREF Institute is to foster objective research, build knowledge, support thought leadership, and enhance understanding of strategic issues related to higher education and lifelong financial security. For additional information, please visit www.tiaa-crefinstitute.org.