New study spotlights public policy priorities
across the multigenerational workforce
LOS ANGELES,
June 25,
2024 /PRNewswire/ -- Just one in five U.S. workers
(20%) are "very" confident they will be able to fully retire with a
comfortable lifestyle, according to The Multigenerational
Workforce: Life, Work, and Retirement, a new report
released by nonprofit Transamerica Center for Retirement Studies®
(TCRS) in collaboration with Transamerica Institute®.
"Millions of U.S. workers are at risk of not achieving a
financially secure retirement. The situation is intensifying with
Social Security's and Medicare's projected funding shortfalls,
population aging, skyrocketing costs of long-term care, and
workers' obstacles in saving and investing," said Catherine Collinson, CEO and president of
Transamerica Institute and TCRS.
The Multigenerational Workforce: Life, Work, and
Retirement is part of TCRS' 24th Annual
Retirement Survey, one of the largest and longest-running surveys
of its kind. The report examines the retirement outlook of U.S.
workers aged 18 and older who are employed by for-profit companies.
It provides comparisons of responses by Generation Z, Millennials,
Generation X, and Baby Boomers.
Priorities for the President and Congress to Improve
Retirement Security
Workers' top priority for the President and Congress to help
people have a financially secure retirement is addressing Social
Security's funding shortfalls (58%), according to the survey's
findings. Other priorities include addressing Medicare's funding
shortfalls (46%), making out-of-pocket health care expenses and
prescription drugs more affordable (46%), ensuring all workers can
save for retirement in the workplace (45%), increasing access to
affordable housing (37%), implementing financial literacy
curriculum in schools (37%), innovating more affordable solutions
for long-term care (35%), supporting family caregivers (34%),
creating incentives for continuing education (27%), and providing
and/or subsidizing additional broadband access (27%).
How to Address Social Security's Funding Shortfall
"American workers are stressed out about Social Security," said
Collinson. Almost three in four workers (73%) are concerned that
Social Security will not be there for them when they are ready to
retire. Forty-three percent of Baby Boomers and 29% of Generation X
expect it to be their primary source of retirement income,
according to the survey's findings.
When asked how Congress should address Social Security's funding
shortfall, workers are lukewarm about possible actions such as
increasing the maximum earnings subject to payroll taxes (40%),
increasing the Social Security payroll tax rate (38%), preserving
retirement benefit payments for retirees in greatest need (34%),
and raising the retirement age (23%). Just 4% say that Congress
should "do nothing."
"Workers are counting on Social Security for retirement income.
The clock is ticking with the Social Security trust funds'
estimated depletion in the next decade. The sooner Congress takes
action, the more time workers will have to adjust their financial
plans, if needed, before they retire. The longer Congress waits,
the more disruptive the changes could be," said Collinson.
Key Indicators of Retirement Readiness Across
Generations
"Increasingly, today's workers are expected to self-fund a
greater portion of their retirement income compared with prior
generations, but they are not fully equipped to take on the
responsibility and associated risks. Many are on a collision course
toward insufficient savings," said Collinson. The survey finds just
one in five workers (21%) say they know "a lot" about personal
finance and only 32% use a professional financial advisor.
Some good news is most workers are saving for retirement through
an employer-sponsored plan and/or outside the workplace. Younger
generations are getting a head start. Among those who are saving,
Generation Z started at age 20, Millennials started at age 25,
Generation X at age 30, and Baby Boomers at age 35 (medians).
Seventy-six percent of workers are offered a 401(k) or similar
plan by their employers. Generation Z (69%) and Baby Boomers (65%)
are less likely than Millennials (80%) and Generation X (78%) to be
offered a such plan, which can partly be explained by their being
more likely to be employed part time.
Many workers lack adequate emergency savings and, in the event
of a financial setback, some are tapping into their retirement
savings by taking hardship withdrawals and/or early withdrawals
including Generation Z (23%), Millennials (21%), Generation X
(16%), and Baby Boomers (14%).
Baby Boomers, the generation closest to retirement, have saved
just $194,000 in total household
retirement accounts, while Generation X has saved $93,000, Millennials have saved $50,000, and Generation Z has saved $40,000 (estimated medians).
"Now is the time for the President and Congress to restore
confidence and strengthen the U.S. retirement system by addressing
Social Security, Medicare, access to workplace retirement plans,
financial literacy, and other drivers of retirement security," said
Collinson. "At the same time, policymakers and the retirement
services industry must focus on implementing the SECURE 2.0 Act of
2022 and its provisions that make it easier for employers to offer
retirement benefits and help workers save, invest, and protect
their savings."
The Multigenerational Workforce: Life, Work, and
Retirement explores the health and well-being,
employment, personal finances, and retirement preparations of the
multigenerational workforce including Generation Z (born 1997 to
2012), Millennials (born 1981 to 1996), Generation X (born 1965 to
1980), and Baby Boomers (born 1946 to 1964).
Visit www.transamericainstitute.org. Listen to Transamerica
Institute's podcast ClearPath – Your Roadmap for
LifeSM. Follow on LinkedIn, Facebook, and X
(formerly Twitter) @TI_insights and @TCRStudies.
About Transamerica Center for Retirement
Studies
Transamerica Center for Retirement
Studies® (TCRS) is an operating division of Transamerica
Institute®, a nonprofit, private foundation. Transamerica Institute
is funded by contributions from Transamerica Life Insurance Company
and its affiliates. TCRS and its representative cannot give ERISA,
tax, investment, or legal advice. This material is provided for
informational purposes only and should not be construed as ERISA,
tax, investment, or legal advice. Interested parties must consult
and rely solely upon their independent advisors regarding their
situation and the concepts presented here.
www.transamericainstitute.org/about
About the 24th Annual Transamerica Retirement
Survey
The analysis contained in The Multigenerational
Workforce: Life, Work, and Retirement was prepared
internally by the research team at Transamerica Institute and TCRS.
The 25-minute online survey was conducted within the U.S. by The
Harris Poll on behalf of Transamerica Institute between September 14 and October 23, 2023, among
a nationally representative sample of 10,002 adults and an
oversample of 2,020 workers in a for-profit company employing one
or more employees. The data in this press release is shown for a
subsample of 5,730 workers in a for-profit company employing one or
more employees. Data was weighted where necessary for age by
gender, race and ethnicity, region, education, marital status,
household size, household income and propensity to be online to
being them in line with their actual proportions in the population.
Respondents were selected from among those who have agreed to
participate in our surveys. The sampling precision of Harris online
polls is measured by using a Bayesian credible interval and the
worker sample data is accurate to within +1.7 percentage points
using a 95% confidence level. This credible interval will be wider
among subsets of the surveyed population of interest. Percentages
are rounded to the nearest whole percent.
News
Transamerica Center for Retirement Studies®
Los Angeles, Calif.
Media Contact: Kyle Moschen
kmoschen@webershandwick.com
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SOURCE Transamerica Center for Retirement Studies