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Four years after the start of the economic downturn, participants in defined contribution plans remain concerned about their ability to maintain their financial position as well as their jobs. In research conducted for Millionaire Corner by Spectrem Group, it was found that almost three-fourths of plan participants (72 percent) are concerned about maintaining their current financial position. One of the more surprising findings is that 50 percent still worry about losing their job, or their spouse losing a job.
A host of financial concerns continue to plague even individuals who are properly saving assets into a 401(k) or other employer sponsored defined contribution plan. The study was conducted with over 1,977 plan participants in the first quarter of 2012. While plan participants worry about their own financial condition, 62 percent are also worried about the financial situation of their children or grandchildren.
The current discussion around health care reform seems appropriate, because regardless of party differences, more than half of retirement plan participants are worried about their health. Sixty percent are worried about the health of their spouse and 52 percent worry about a family health catastrophe.
With the rising costs of college, 60 percent of plan participants are worried about financing college for their children, and 31 percent worry about helping to finance college for their grandchildren.
On a personal note, almost half (47 percent) are worried about having someone to care for them in their old age.
Retirement plan participants are reflective of the values of mainstream America. As the economic downturn continues, most of these individuals do not feel they will have enough saved for retirement, despite the fact that they are prudently contributing to a plan. Only 42 percent feel they will have sufficient income to live on during retirement, and 39 percent will be delaying their retirement due to the current economic environment. Seventy percent do not believe they will be able to retire when they want.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine Balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
