Benefits reduced and premiums increased, workers worried about retirement

Benefits reduced and premiums increased, workers worried about retirement (Alberta Times) The latest poll from Towers Watson, a retirement consulting company, showed that...

(Alberta Times)

Towers Watson, a retirement consulting company Watson's latest poll shows that although the economy is recovering, it has not made Americans feel more secure about their financial future. In fact, many workers are worried about further cuts to retirement benefits and higher out-of-pocket costs for health care. USA Today reported that the poll found that widespread public concerns have led more than half (55%) of workers to say they are willing to give up future salary increases in order to obtain more guaranteed retirement income. In addition, 50% of the respondents said that they also spend part of their income on ensuring health care benefits. Kevin Wagner, a senior retirement consultant at Towers Watson, said: "The poll results may reflect workers' direct feelings about the volatility of financial markets and continued concerns about the economy and future benefit cuts." Nevin Adams, co-director of the Employee Benefit Research Institute (EBRI), said Americans have gradually come to realize that they must face the reality of retirement. Towers Watson's survey found that although older workers have limited time to make a comeback from the stock market before retirement, younger workers are most worried about retirement security. In fact, the proportion of workers aged 40 and under who are willing to pay more to secure retirement benefits has increased by about 70% since 2009. To help ease workers' concerns, the Treasury Department recently proposed rules that would make it easier for workers to put a portion of their retirement savings into an annuity in retirement through 401(k) plans. However, this move will not address all financial risks faced by workers. The survey shows that nearly two-thirds, or 64%, of the respondents said that the rising cost of health care is also the main reason for their worries about retirement. A report released by the Insurance Retirement Research Institute (IRI) in January pointed out that a healthy 65-year-old man can expect health care costs for the rest of his life to be $350,000, and for women, at least $417,000.