Only about one in seven employees say they are on track to retire with 80% of their income, according to new research.
Financial Finesse, El Segundo, Calif., published this finding in a summary of results from a new survey on employee financial trends. The research is based on an analysis of questions received by the company’s team of certified financial planners and employees’ responses to an online financial wellness assessment.
Only 14% of employees report being confident they are on track to retire with 80% of their income (or their goal) in retirement. This is a slight drop from 15% in the first quarter of 2011, the survey says.
Despite a strong market rebound over the last two quarters, employees remain uncertain about their investing decisions and ability to retire. The survey says this “appears to be a result of employees continuing to realize they are not on track to retire comfortably since the recession.”
Among the report’s other key findings:
• Employees are becoming more proactive about their finances in general and retirement planning in particular. Adjusted for seasonal tax questions, 73% of employee financial questions were proactive, focused on taking control of finances to increase success, versus reactive, focused on addressing a pressing financial problem.
This is an improvement from Q1 2011 when 67% of employee financial questions were proactive in nature.
• Investing confidence has not improved, despite recent stock market gains. Only 33% of employees are confident their investments are allocated appropriately in Q1 2012—down from 34% in Q1 2011.
Liz Davidson, CEO and Founder of Financial Finesse, says that although employees are far from where they need to be, they are showing positive growth by realizing they are behind as they continue to put strong emphasis on proactive financial issues. Davidson adds that she is concerned, however, by a slight drop in financial wellness scores reported in Q1 2012 vs. Q1 2011. She also worries that a continuing slide continues could impact the trend towards more proactive financial planning.