TOPEKA, Kan., Oct. 22, 2014 (GLOBE NEWSWIRE) -- More than two-thirds (68 percent) of educators in Generations X and Y – those Americans born approximately between 1965 and 2000 – believe it's harder for their generation to save for retirement than it was for prior generations, according to the Greenwald & Associates' Gen XY Financial Maturity Study, sponsored by Security Benefit.
Shifts to state pension systems may be, in part, responsible for the significant portion of educators who feel saving for retirement is an uphill struggle. While pensions still remain part of the retirement equation for the majority of educators, with 52 percent saying they have a traditional pension or other form of defined benefit plan, more than one-third (36 percent) of educators still report feeling behind in their retirement savings.
"A complex, ever-changing pension landscape makes saving for retirement more challenging so it's no surprise a majority of educators find it difficult to save for retirement," said Al Dal Porto, Vice President Security Benefit. "It's clear we have an obligation to educate our educators on how they can successfully plan for retirement in the face of a shifting state pension system that continually re-writes the rules of retirement."
Pension System Squeeze
Over the last decade, more than 40 state retirement systems have changed their pension benefits, with changes ranging from new tiers to freezing cost of living adjustments (COLAs), or even converting retirement systems to defined contribution plans. Add in that more than half of all states fall below the fiscally sound threshold of 70 percent funded status, according to "Morningstar's The State of State Pension Plans 2013" report, and it's clear educators are facing significant retirement planning challenges moving forward.
"The shifts in the retirement landscape are well-known across America, but it's especially pronounced within the education community," said Dal Porto. "The unfortunate reality is a 'one-size-fits-all' approach isn't feasible because of how pension changes impact educators in varying career stages. Younger teachers are facing a drastically different retirement planning process than mid- and late-career educators, so it's important for school districts to provide a wealth of resources to help them make informed choices that best fits their current career stage."
Need for Comprehensive Financial Support
School districts have the ability to offer the comprehensive retirement savings and guidance their employees desire all in one place. Support from educators for workplace-based retirement savings combined with a preference for guidance from financial advisors further serves to highlight the need for school systems to work with financial advisors to provide comprehensive financial support for employees.
Over half (55 percent) of educators say they would contribute more to their workplace retirement and insurance benefits if there was greater in-person education and advice. Nearly four in ten educators (39 percent) say they prefer to save for retirement through their employer. A similar percentage would prefer to work with a financial professional when it comes to making decisions about their workplace retirement savings plans (41 percent), as well as any retirement savings outside of work (37 percent).
"School districts that partner with a financial professional to offer comprehensive retirement planning to employees create an environment that removes financial concerns from the equation and lets educators remain focused on what they do best, which is educating the next generation of Americans," said Dal Porto.
About the Study
A national, online study of Americans ages 21 to 48 was conducted from April 8-21 2014. A total of 2,122 individuals completed the survey. In a similarly-sized random sample survey, the margin of error would be +/- 2.2 percentage points at the 95 percent confidence level. The 2014 Gen XY Financial Maturity Study was conducted by Greenwald & Associates, an independent market research company, on behalf of a consortium of financial services companies, including Security Benefit.
About Security Benefit
Security Benefit is a 122-year-old, Kansas-based company, which in recent years has become one of the fastest growing companies in the U.S. retirement market. Through a combination of innovative products, exceptional investment management and a unique distribution strategy, Security Benefit has become a leader in a full range of retirement markets and wealth segments. To learn more about Security Benefit, visit www.securitybenefit.com.