Public-sector employees are slightly more worried today about their retirement security than they were two years ago, a new analysis has found.
Just 18 percent of full-time public workers are “very confident” about their retirement income prospects -- down from 21 percent in 2012, according to a report released Wednesday by the Center for State and Local Government Excellence (SLGE) and the TIAA-CREF Institute. Of particular concern were health-care costs, future benefits from Social Security and Medicare, and employees’ own saving and investing for retirement. Teachers' confidence in particular dropped, with a 7 percentage-point shift from “very confident” to “somewhat confident.”
Much of the fear has come from changes to retiree health care, which is generally less protected than pensions, according to the report. With Americans living longer and health-care costs rising, many state and local governments have shifted part of that bill to retirees or, in some instances, cut retiree coverage altogether. Detroit, Chicago and Sheboygan County, Wis., for example, are all now making their employees get their own health insurance on the Obamacare exchanges, through a private insurer or a spouse.
“This reality has reduced public workers' confidence in these benefits and raises new questions about how much they need to save for health expenses in retirement,” Joshua Franzel, SLGE vice president of research and co-author of the report, said in a statement. “In such an environment, it is important for all state and local workers to take advantage of financial education and planning resources as well as available savings opportunities.”
In many cases, workers put off retiring. Twenty percent said they've changed their expectations for retirement in the last year -- with three in four of those surveyed now planning to retire later.
Still, for all the worry, just 38 percent of employees have actually sought retirement advice in the past three years -- down from 51 percent in 2012. But more people are taking to heart the advice they do receive. This year, one-quarter of those respondents said they followed all the advice given to them; in 2012, just 18 percent did.
Additionally, the portion of workers who said they expect to work for pay after retirement took a big dip from 72 percent in 2012 to 49 percent in 2014, but the report notes that some will do so by choice. Sixty-two percent said they'll keep working to stay active; 49 percent want the extra money; 28 percent enjoy working; and 11 percent want to try a new career. But 33 percent plan to return to work to keep health insurance and 30 percent will need the money to make ends meet.
This expectation of continued work is not surprising given that the majority of public employees are knowledge workers who, in general, want to work beyond normal retirement ages," the report said.
The report surveyed 1,263 state and local government employees across the nation.