Employees, Concerned About Inflation and Longevity, Want Income Options in Retirement Plans, Survey Says

But Plan Sponsors Are Concerned About Complexity, Costs, and Choice

WASHINGTON, DC (January 25, 2024) – Concerns about the impact of inflation on their retirement savings is raising fears among employer-sponsored retirement plan participants that they will run out of money in retirement, according to a new survey by Greenwald Research.

The great majority of plan participants – 83% – say their employers should offer in-plan retirement income options, and most believe there should be more than one choice.

The latest consumer and plan sponsor surveys in Greenwald’s In-Plan Insights Program found that more than four in five retirement plan participants are interested in options that provide guaranteed lifetime income, or GLI.

“This year’s survey finds participants prefer a retirement income option that can grow over time, even if the starting amounts are lower,” says Greenwald Research CEO Lisa Greenwald. “Inflation concerns seem to be driving this preference for participants, while sponsors are more torn between lower initial payments that increase with time versus somewhat higher payments that remain steady.

“Most plan sponsors believe income options with GLI would be best for participants,” Greenwald says, “but they have strong concerns about the complexity of those income options and the fees that come with them.”

The survey found that 59% of plan sponsors view in-plan retirement income options as too complex. Nearly one in three are concerned that associated fees will mean higher costs for their companies, while 30% are concerned about the additional administrative work that offering income options would require. Sponsors also remain concerned about ensuring that participants have enough choices of retirement income options on the menu.

Nevertheless, one in three plan sponsors claim they already offer income options, while another 37% say they’re considering offering retirement income options. Asked to explain what income options are available or being considered, sponsors’ responses are often not what the industry would consider a DC plan retirement income option. “While this underscores the need for continued, foundational education on the retirement income category, the interest and perceived need for this type of solution seems quite real,” says study director Eric Sondergeld.

One possible motivator: half of sponsors say they prefer that participants keep their money in their workplace retirement plan at retirement. The survey found that retirement income options make participants twice as likely to keep their money in the plan after they retire – 57%, compared to 28% who want to move their assets out of the plan when they stop working.

“Retirement Income Options” and “Guaranteed Income Options” tied as the top names for the DC income category among both participants and sponsors – emphasizing clarity and simplicity. The category name “In-Plan Annuity Options” ranked last among sponsors. Though 8 in 10 sponsors agree that annuities are an effective “paycheck replacement” in retirement, they speculate that participants will be hesitant due to their reputation. Indeed, half of participants are reluctant to consider annuities in their workplace retirement income plans.

There is some light at the end of the tunnel, however. Three in four participants and nine in ten sponsors find it compelling to know that annuities are the only way to generate GLI and that they have evolved in positive ways.

Other key findings of the latest In-Plan Insights Program consumer and plan sponsor surveys include:

  • 90% of plan participants are concerned about the impact of inflation on their retirement income.
  • Participants’ concern about running out of money in retirement has grown significantly – 76% of responding participants reported that concern this year, up from 70% a year ago.
  • Fully half of plan participants say employers should take at least a moderate level of responsibility for employees’ retirement preparedness, financial security and creating retirement income. Another 47% think employers have some responsibility for the financial security of employees who have retired. Plan sponsors seem to agree – three in four say their company is responsible for helping employees prepare for and generate income in retirement. 68% say they have responsibility for the long-term financial security of retired employees.
  • Almost all sponsors believe a comprehensive retirement income planning program would increase participants’ comfort level with income options, increase the amount participants are willing to contribute, and increase participant utilization of in-plan retirement income options. Three in four sponsors believe retirement income planning programs with access to a human advisor would have greater value than a strictly online planning program.

About the Research

Greenwald’s In-Plan Insights Program is designed to explore the changing landscape of retirement income options in defined contribution plans. The 2023 study included online surveys conducted from September 26 to October 23, 2023 of 1,003 plan participants aged 30-70, with at least half aged 50 or over. Respondents were employed full-time at a company with at least 50 employees, had a personal income of $50,000 or more, and are currently contributing to their employers’ retirement savings plan. It also included surveys of 503 plan sponsors with at least 50 employees. More than 100 of the responding sponsors have 1,000 or more employees. Plan sponsors were surveyed between October 4 and November 18, 2023.

The 2023 In-Plan Insights Program survey reports are available for purchase. Contact Greenwald Research at info@greenwaldresearch.com to learn more.

About Greenwald Research

Greenwald Research is a leading independent custom research and consulting partner to the health and wealth industries that applies creative quantitative and qualitative methods to produce knowledge that helps companies stay competitive and navigate industry change. Visit greenwaldresearch.com to learn more.

Contact:
Herb Perone
media@greenwaldresearch.com

Video Series: Have We Moved Beyond NPS?

Did you miss our video series? Lisa Weber-Raley, Greg Hershberger, and Doug Kincaid recently sat down to talk about the use of Net Promoter Score (NPS) as a metric in the health and wealth industries. NPS is traditionally asked as “How likely are you to recommend (company name) to your friends and family?” with responses on a 0-10 scale.

The underlying thought tends to be that a high NPS means a happy customer is driving their friends and family to enroll or select them. However, a Greenwald Research survey suggests those kinds of carrier choice or enrollment conversations are not happening: 54% of those with health insurance and 57% with a life/disability policy do not talk to family and friends about picking a carrier, which might be because a sizeable portion of Americans feel a lack of choice in the matter, especially when many obtain their health and ancillary benefits through their employers.

Why, then, do we continue to ask consumers if they would be likely to recommend their {carrier company}?

Our video series explores the following concepts as they relate to NPS:

  • Defining what it is and how it’s currently used
  • Getting to the root of what your organization really wants to measure
  • Measuring how well your organization delivers promises to the end consumer
  • Capturing and examining the “why” behind responses to see what’s really driving changes in score

Watch the Series

Where do you stand on this issue? Let’s talk more about better ways to measure NPS or to figure out the measurement that best works for your organization.

Survey: Market Optimism Makes a Comeback, But There is Lingering Concern About the Direction of the Economy

Remote Work Arrangements Have Major Impact on Retirement Timing and Transition

Washington, DC (December 12, 2023) – An improving economy is restoring consumers’ financial confidence, with nearly half of consumers saying they’re optimistic about their investments (46%). This marks a significant boost from 2022, in which only 31% were optimistic. Read more

The Retirement Confidence of Caregivers

By: Marie Ammar and Sara Rubinstein
10/16/2023 Read more

Survey: Majority of Workers Worry About Household Finances and Debt

Majorities Also Concerned about Workplace Well-Being, Reduced Hours, and Layoffs

Washington, DC (October 5, 2023) – The majority of American workers are concerned about their household’s financial well-being and more than three out of four say their debt level is a problem, according to the just-published Workplace Wellness Survey.

Major findings from the 2023 Workplace Wellness Survey, a joint project of Greenwald Research and the Employee Benefit Research Institute,  identify the major financial stressors as having enough savings for an emergency, paying monthly bills, saving enough for retirement, debt, and job or income security.

The challenge for employers extends beyond workers’ financial concerns. “A third of workers report concern about their emotional well-being or mental health, and half say they often or always feel stressed – and that impacts their performance at work,” says Greenwald Research CEO Lisa Greenwald. “But workers are torn on how well their employer communicates about mental health and work-life balance. Only 37% rate their employer’s communication as excellent or very good, while a nearly equal number – 35% — rate it as fair or poor.”

The fourth Workplace Wellness Survey examines worker attitudes toward employment-based benefits as well as financial well-being, health insurance and retirement benefits issues. Major findings from this year’s survey include:

  • More than half of survey respondents (52%) expressed moderate to high concern over their household’s financial well-being, down from 60% last year, perhaps due to improvements in the overall economy. But majorities say they continue to be concerned about inflation, a possible recession, and rising housing costs. They also worry about the possibility that employers will reduce hours and benefits, cut wages, and lay workers off. More than half of workers (57%) do not feel financially prepared for reduced hours or temporary unemployment.
  • A large majority of workers (76%) consider their level of debt a problem, with majorities specifically citing credit card debt and medical or health-related debt. Nearly half (46%) say a health emergency has contributed to their debt.
  • Just over half (51%) of workers are satisfied with their current jobs, down from 59% last year. A similar number say they are likely to stay with their current employer for the next two years.
  • Nearly eight in 10 workers are at least somewhat satisfied with their employee benefits package, similar to last year. More than half of employees (54%) say a greater financial contribution from their employer would be a valuable improvement to benefits programs – up markedly from 42% last year.
  • Health insurance and retirement plans are cited as the most important benefits, followed by paid time off, dental or vision insurance, and flexible work (hybrid or remote) arrangements.
  • Company culture is cited by 61% of respondents as having the greatest negative impact on their overall well-being. Only 22% say it has a positive impact. Family – cited by 85% – has the greatest positive impact.
  • One in four American workers is an unpaid caregiver to a family member, devoting an average of 21 hours per week to caregiving duties. Of that group, 44% have spent their own money on caregiving expenses, 25% have reduced their work hours, 20% have taken on additional debt, and 18% have reduced the amount they contribute to their retirement savings plan.
  • Nearly seven in 10 workers (68%) agree that their employer has a responsibility to ensure their employees are financially secure and well. An even higher number (79%) believe their employer has a responsibility to make sure employees are mentally healthy and emotionally well, while 74% say that responsibility extends to physical health.
  • Only 44% of workers say their employer offers a financial wellness program, down from 56% last year. Nearly half (47%) say their employers offer health wellness programs. Nearly six in 10 workers rate their employer’s efforts to help their financial well-being as at least good, down slightly from 2022. Regarding employer efforts to help improve emotional and mental well-being, 63% say those efforts are good or better this year, compared to 72% in 2022. Sixty-nine percent rated employer efforts to improve physical well-being as good or better, comparable to last year.

A short report of detailed findings of the 2023 Workplace Wellness Survey are available online. The survey was conducted with the financial support of AARP, Bank of America, Cigna, Fidelity Investments, Mercer, Morgan Stanley, NRECA, OneAmerica, Voya Financial, Merck, New York Life, and Unum.

About the Survey

Greenwald Research conducted online interviews with 1,505 full-time and part-time workers ages 21-64, including 753 caregiver workers, from July 8 through August 1, 2023. The margin of error (at the 95% confidence level) is plus or minus 2.6 percentage points.

Greenwald Research is a leading independent custom research firm and consulting partner to the health and wealth industries that applies creative quantitative and qualitative methods to produce knowledge that helps companies stay competitive and navigate industry change. By leveraging deep subject matter expertise and a trusted consultative approach, Greenwald offers comprehensive services for weaving rich research stories that answer strategic business questions.

The Employee Benefit Research Institute is a non-profit, independent, and unbiased resource organization that provides the most authoritative and objective information about critical issues relating employee benefit programs in the United States.  For more information, visit www.ebri.org.

Contact:
Herb Perone
herbperone@gmail.com
301-512-7636

Survey: In a Dramatic Turnaround, Financial Professionals’ Optimism in the Investment Outlook Nearly Doubles

Financial Consumers Also More Confident if a Bit More Cautious

 

Washington, DC (September 27, 2023) – Financial professionals are far more optimistic about the market this year than last, and they’re more optimistic than the clients they serve.

Greenwald Research’s just-released 11th annual Retiree Insights Program Surveys found 64% of financial professionals express optimism about the current investment outlook, nearly double the 34% in 2022. And the number of financial professionals expressing pessimism was just 8%, down markedly from 25% last year.

Although market optimism is not as bullish as it was back in 2021, financial professionals now have higher expectations for the total investment return they believe they can secure for their clients over the next 12 months. Why the higher expectations? “Fixed investments,” says Doug Kincaid, Greenwald’s Managing Director for Financial Services. With current high interest rates, “Financial professionals now expect a 6.7% return on fixed investments over the next 12 months – more than triple their forecast for last year and double what they expected the year before. They’re optimistic about equity returns, too – predicting an 8% return this year versus 6% in 2022.”

Consumers are a bit more cautious. Under half (46%) expressed optimism, but that’s still up significantly from 31% last year. Consumers expressing pessimism about the investment outlook plunged from 36% to 18%.

“There’s a deeper uncertainty about the broader economy among consumers,” Kincaid says. “Only 28% of them believe the economy is heading in the right direction, compared to 54% of financial professionals.”

Politics & Media

Financial professionals say the impact of politics and media reports about the economy heighten consumer worries and influence their decision-making. The survey found the political environment is the top worry for consumers (with 83% saying they worry about it), far ahead of inflation, a possible recession, and global conflicts/crises. Nine in 10 professionals say clients ages 50-70 bring bad financial ideas to them that they find on social media. Eight in 10 agree that clients are more pessimistic about the market when there is heavy media coverage of it.

Benchmarking Returns

Consumers’ top benchmark (56%) for evaluating the management of their investments is how they compare to previous years – and a nearly equal number of financial professional professionals (57%) agree. However, professionals overestimate clients’ reliance on other benchmarks, including comparison to a specific index’s returns (51% of professionals say that’s important to consumers, but only 29% of consumers view it as important).

Pros & Cons of Artificial Intelligence

Both financial professionals and consumers are uncomfortable with artificial intelligence (AI) playing a role in the delivery of financial advice and retirement planning. In both groups, only one in 10 are extremely/very comfortable with AI, and only about a quarter are somewhat comfortable.

Nevertheless, financial professionals say the use of AI is not disappearing anytime soon: 7 in 10 disagree with the idea that AI is just a trend. While half of professionals believe AI is a threat to their profession, they do see ways AI can be beneficial to them. For instance, 67% say AI tools could help with customer relationship management through personalized client communications, lead generation, appointment scheduling, and client onboarding. The same number says AI could be useful in real-time market analysis, monitoring markets and providing up-to-date information about market trends, news, and investment opportunities. And 6 in 10 say AI could be beneficial for investment portfolio optimization, retirement savings planning, and/or risk assessment and management.

Professional-Client Communications

As volatility has declined and as consumer optimism about the markets and the investment outlook has increased, consumers’ desire for more frequent communications with their financial professionals has fallen – from 40% last year to 30% this year. On the other hand, financial professionals say they want to have more communication with their clients – a little over 60%, much like last year.

Challenges of Changing Retirement Ages

Financial professionals say a greater variance in the age that clients retire has presented new challenges for retirement income planning. Nearly 7 in 10 professionals see they’ve seen more variance in retirement ages, and half of the retirees surveyed say they retired earlier than planned. Six in 10 consumers who haven’t retired and work from home say they are more likely to postpone retirement because of the flexibility of their work. Retirement age changes complicate retirement income planning: a whopping 94% of professionals say earlier retirement makes income planning challenging, and 75% say the same for clients who change how they plan to transition into retirement. Perhaps because of these changing dynamics professionals say about 29% of their retired clients need more lifetime income, up from 22% two years ago.

About the 2023 Retiree Insights Program Surveys

The survey was conducted in July 2023, with 301 financial professionals and 1,003 consumers participating. For more information about the Retiree Insights Program, contact Doug Kincaid at dougkincaid@greenwaldresearch.com.

Greenwald Research is a leading independent custom research firm and consulting partner to the health and wealth industries that applies creative quantitative and qualitative methods to produce knowledge that helps companies stay competitive and navigate industry change. By leveraging deep subject matter expertise and a trusted consultative approach, Greenwald offers comprehensive services for weaving rich research stories that answer strategic business questions.

Contact:
Doug Kincaid
Managing Director, Financial Services
dougkincaid@greenwaldresearch.com

The Cost of Caregiving; Mental, Physical, and Financial Health All Suffer

Survey Shows Caregivers More Likely to Have Retired Early Due to a Reason Beyond Their Control, with Smaller Savings


Washington, DC (August 7, 2023) – A new survey shows that unpaid caregivers – just over one in five Americans 25 or older – experience more financial challenges than non-caregivers. And they’re more likely to retire earlier than planned for reasons beyond their control – with lower savings and a reduced lifestyle.

The new 2023 RCS Caregivers Report released by Greenwald Research and the Employee Benefit Research Institute (EBRI) examines the retirement prospects, preparations, and experiences for unpaid caregivers vs. those who do not provide that care. The report, which relies on data collected for the two organizations’ 2023 Retirement Confidence Survey, defines caregivers as those who provided unpaid care for an adult and/or a child with special needs within the previous 12 months in a non-institutional setting.

That care included helping the recipient with at least one activity of daily living (such as bathing, dressing, eating, using the toilet) or one instrumental activity of daily living (including more complex activities like managing medications, food preparation, housekeeping, laundry, managing finances).

“Unpaid caregivers play a vital role in the lives of spouses, family members and friends who need help,” says Greenwald Research CEO Lisa Greenwald. “But they often provide that assistance at significant personal cost. What they do out of love and a sense of responsibility impacts their health, their earning capacity, and their long-term financial well-being.”

Presenting some of these results in mid-July, Lisa Weber-Raley, Chief Research Officer of Greenwald Research who leads caregiving research for the firm said: “We see caregivers – as a result of caregiving – stopping savings, racking up more debt, and using up their short-term and long-term savings. Those impacts are more common among lower-income and younger caregivers, so that idea that they’re in their prime working years and having to take a break from work, or not saving as much, will erode their confidence in what’s ahead.”

Key findings presented in report include:

Caregiving is likely to have a negative impact on physical, mental, and financial health: Among caregivers who are still in the workforce, 66% say their mental health is negatively impacted, 57% say their physical health is negatively impacted, and 54% say they have trouble working the hours they want or need.

The majority of working caregivers provide financial support to their caregiving recipient: 55% of working caregivers provide financial support, with just over a third of them providing $5,000 to $14,999 in the past year. Among retired caregivers, 37% provide financial support, with just under 40% of them contributing $5,000 to $14,999.

Caregivers are more likely to have fewer assets and greater problematic debt: One-quarter of caregivers have less than $1,000 in savings and investments, compared to 15% of non-caregivers. Nearly two of three caregivers (64%) say debt is a problem, compared to just over half (52%) of non-caregivers.

Among those who retired earlier than planned, nearly 4 in 10 caregivers (38%) did so because of the burdens of caregiving for a family member. Another 35% of those who retired early did so because of a health problem or disability. The top reason non-caregivers gave for retiring earlier than planned was that they could afford to.

Caregivers who are retired are more likely to say their overall lifestyle is worse than they expected: Specifically, 31% of caregiving retirees say their retirement lifestyle is worse, compared to 20% of non-caregiving retirees.

Higher income caregivers are less likely to be confident about their retirement prospects than high income non-caregivers: 66% of caregivers surveyed are employed, and 52% of them have annual household incomes of $75,000 or more. 18% of that group say they’re not confident about having enough money to cover basic expenses in retirement, compared to 12% of non-caregivers in that group.

The 2023 RCS Caregivers Report and the 2023 Retirement Confidence Survey short report are available online. A summary of the 2023 Retirement Confidence Survey findings is available here. A webinar presenting key results is available here.

 

About the Survey

Greenwald Research and EBRI surveyed 2,537 Americans aged 25 or older from Jan. 5 through Feb. 2, 2023, for this year’s Retirement Confidence Survey. The survey included 1,320 workers and 1,217 retirees and included an oversample of roughly 944 completed surveys among caregivers (598 workers and 346 retirees).

About Retirement Confidence Survey Sponsors

Greenwald Research and EBRI would like to thank the 2023 RCS sponsors who helped shape this year’s survey: American Funds/Capital Group; Bank of America; Blackrock; Columbia Threadneedle; Empower; Fidelity Investments; FINRA; Jackson National; J.P. Morgan Chase & Co.; Mercer; Mutual of America; Nationwide; NEFE; New York Life; PGIM; PIMCO; Principal Financial Group, and T. Rowe Price.

About Greenwald Research

Greenwald Research is a leading independent custom research firm and consulting partner to the health and wealth industries that applies creative quantitative and qualitative methods to produce knowledge that helps companies stay competitive and navigate industry change. By leveraging deep subject matter expertise and a trusted consultative approach, Greenwald offers comprehensive services for weaving rich research stories that answer strategic business questions. For 33 years, Greenwald has partnered with the Employee Benefits Research Institute to conduct the annual Retirement Confidence Survey.

About the Employee Benefit Research Institute (EBRI)

The Employee Benefit Research Institute is a non-profit, independent, and unbiased resource organization that provides the most authoritative and objective information about critical issues relating to employee benefit programs in the United States.

# # #

Contacts:

Herb Perone
herbperone@gmail.com
301-512-7636

Quinncee Payne
quinnceepayne@greenwaldresearch.com
202-686-0300

Millennial Mental Health and Finances

By: Greenwald Research
6/15/2023 Read more

Millennials Report Higher Need for Mental Health Services, Heightened Financial Stress

Nearly 4 in 5 Saw a Professional Provider in the Past Year, Survey Finds

 

Washington, DC (June 15, 2023) – Millennials are not in the best of health – physically or mentally – and insurance companies need to make improvements in the delivery of mental health services to head off a potential crisis, a new survey by Greenwald Research finds.

The just-released Millennial Mental Health and Finances survey shows that Millennials rate their own health worse than the national average, are overly stressed money worries, and are delaying treatment for physical and mental health problems because of financial concerns.

“Mental health, physical health and finances are intrinsically linked,” says Greenwald Research Chief Research Officer Lisa Weber-Raley. “Millennials’ mental health needs are high, and there are clear ways health insurers can aid Millennials, who are a key part of their customer base. At a minimum, insurers should broaden their in-network mental health resources and make their websites easier to navigate so those resources are easier to find. Not only will they be benefitting Millennials, but themselves and the broader health care industry.”

Pandemic-induced social and professional isolation and disruptions have sparked a national conversation about mental health care. Demand for services has increased – especially among younger generations – while we’re facing a nationwide shortage of mental health providers. Greenwald Research surveyed 543 privately insured Millennials to better understand their need for mental health care, the barriers they face in accessing that care, and how paying for those services impacts them financially.

Key findings from the survey include:

  • Millennials rate their own health worse than the national average. Just 44% of respondents rate their overall health as excellent or very good, compared to 52% of the overall population.
  • What’s worse, millennials rate their mental health as worse than their physical health. Nearly 1 in 3 (32%) say their mental health is fair or poor. That’s twice as many who say their overall health is fair or poor.
  • Millennials’ need for mental health care is high: 55% report they have needed mental health services in the past year. An even higher number – 79% — actually saw a mental health professional in the last year.
  • 95% say their mental health provider being covered by their health insurance is important so that care will be more affordable. This preference is especially strong among women, who tend to have lower salaries than men.
  • 66% of Millennials rely on their health insurer’s website to find a mental health professional, but those with the greatest need say it’s difficult to navigate those websites, so they are less likely to access help.
  • The majority of privately insured Millennials feel financially insecure and are carrying significant credit card, mortgage and other debt. A whopping 71% of the survey respondents say thinking about finances causes a great deal of stress and 68% say they have very little money left after monthly expenses. 51% say they’ve delayed physical and mental health care visits over the past year for purely financial reasons.

Delaying mental health care leads to a number of problems, including less-than-effective trips to urgent care or emergency rooms in the short term and high-cost claims when those health problems can no longer be ignored.

“At 26 to 41 years of age, Millennials are still relatively young, but the oldest among them are entering middle age and the higher costs associated with old age health care are just around the corner,” Weber-Raley says. “High-cost claims could skyrocket in the next few decades if left unchecked. Helping Millennials access behavioral and mental health care could help insurance companies control the cost of care for decades to come.”

The full Millennial Mental Health and Finances survey is available online at https://greenwaldresearch.com/millennial-mental-health.

 

About Greenwald Research

Greenwald Research is a leading independent custom research firm and consulting partner to the health and wealth industries that applies creative quantitative and qualitative methods to produce knowledge that helps companies stay competitive and navigate industry change. By leveraging deep subject matter expertise and a trusted consultative approach, Greenwald offers comprehensive services for weaving rich research stories that answer strategic business questions. For 33 years, Greenwald has partnered with the Employee Benefits Research Institute to conduct the annual Retirement Confidence Survey.

 

Contacts:

Herb Perone
herbperone@gmail.com
301-512-7636

Quinncee Payne
quinnceepayne@greenwaldresearch.com
202-686-0300

Survey: Americans’ Optimism About Living Comfortably Through Retirement Declines

Eroding Account Asset Values, Inflation, Market Volatility, Recession Fears Fuel Concerns

 

Washington, DC (April 27, 2022) – American workers’ and retirees’ confidence about financing a comfortable retirement has dropped significantly over the last year, returning to levels last seen in 2018, the 2023 Retirement Confidence Survey finds.

The last time the survey recorded a decline of this magnitude was in 2008, during the global financial crisis. Read more