2011 Retirement Readiness Assessment. September 2011

Transcription

1 2011 Retirement Readiness Assessment September 2011

2 Two Issues Presented Today What has changed since the last Assessment? For which topics do members need additional information? 2

3 What has changed since the last Assessment? 3

4 Activities Related to Retirement Planning 2008/2011 Active More active members conduct independent retirement planning research in 2011 than in Half of active members do not read written materials from CalSTRS % 55% 53% 48% 45% 5 51% 49% 44% 34% 25% 29% % 14% 16% Read other written material provided by CalSTRS Consulted with my family and/or friends Read CalSTRS written material received at work Consulted with a professional financial planner Visited the CalSTRS web site Conducted independent research and planning Attended a CalSTRS Retirement Workshop Interviewed with a CalSTRS Benefits Counselor Other Q9 (A). What actions have you taken to plan for retirement? Base: Total respondents answering. (N=514 / N=3231) Denotes a significant difference. 4

5 Activities Related to Retirement Planning 2008/2011 Retired In 2011, retired members are more likely to read CalSTRS written material, consult with a professional financial planner and visit the CalSTRS website. Fewer retired members report interviewing with a CalSTRS Benefits Counselor in 2011 than in % 64% 48% 43% 45% 46% % 34% 29% 33% 22% 28% 29% 17% 21% 9% 9% Interviewed with a CalSTRS Benefits Counselor Read CalSTRS written material received at work Attended a CalSTRS Retirement Workshop Consulted with my family and/or friends Consulted with a professional financial planner Read other written material provided by CalSTRS Conducted independent research and planning Visited the CalSTRS web site Other Q4 (R). What actions did you take to plan for retirement? Base: Total respondents answering. (N=586 / N =2208) Denotes a significant difference. 5

6 Total Balance of All Retirement Savings 2008/2011 Active More than half of active members have supplemental savings of less than $100,000. An increased number of active members have less than $50,000 in total retirement savings in 2011 vs Total Balance of All Retirement Savings Plans Active 2008 (N=578) 2011 (N=3283) $0 3% 5% $1-$49,999 28% 38% $50,000-$99,999 21% 2 $100,000-$199,999 15% 16% $200,000-$299,999 9% 7% $300,000-$399,999 3% 4% $400,000-$499,999 2% 2% $500,000-$999,999 3% 2% $1 million or more 1% Don't know 14% 6% Q15 (A). What is the current total balance of ALL of your voluntary retirement savings plans? Base: Total respondents answering. Denotes a significant difference. 6

7 Obstacles to Retirement Savings 2008/2011 Active A greater number of active members cite medical and health care expenses as an obstacle to retirement savings in 2011 than in Rating % 2 32% 35% 26% 28% 23% 18% 15% 15% 1 12% 17% 33% 9% 9% Making mortgage payments (N=518/ N=3724) Providing for dependent child/children (N=388/ N=3373) Paying off consumer debt (N=523/ N=3706) Medical and health care expenses (N=533/ N=3742) Paying off student loans (myself/ spouse) (N=331/ N=3294) Providing for dependent adult(s) (N=341/ N=3140) Paying off student loans (my child/ children) (N=275) NA NA NA NA Paying for college (my child/ children) (N=3328) Paying for a wedding (N=3121) Change in marital status (N=3066) Q17 (A). How significant of an obstacle are each of the following financial obligations in preventing you from saving sufficiently for retirement? Scale: 1=Not an Obstacle; 10=Extremely Significant Obstacle. Base: Total respondents answering. Denotes a significant difference. 7

8 Retirement Age Planning 2008/2011 Active In 2011, more actives raised their target retirement age to 61 or older, and the average target retirement age rose from 60.9 in 2008 to Age Plan to Retire (Active) % 28% 29% 3 22% 19% 15% 14% 60 or under 61 to or over Do not have a target age Q5 (A). At what age do you plan to retire with CalSTRS? Base: Total respondents answering. (N=592 / N=3921) Denotes a significant difference. 8

9 For which topics do members need additional information? 9

10 Retirement Concerns 2008/2011 Active In 2011, an increased number of active members express concern regarding CalSTRS having sufficient funds to pay benefits versus what was measured in % 8-10 Rating of Active members have visited CalSTRSBenefits.Us (N=3938) % 85% 73% 77% 67% 77% 55% 54% 56% 63% 2 Being able to afford medical expenses in retirement (N=593/N=3921) Being able to maintain standard of living throughout retirement (N=600/N=3935) CalSTRS will have sufficient funds to pay benefits (N=597/N=3849) Social Security will have sufficient funds to pay benefits (N=507/N=3300) Being able to retire at desired age (N=595/N=3907) Q10 (A). The following are some financial concerns you may have regarding your retirement. Please rate your level of concern. Scale: 1=Not at all Concerned; 10=Extremely Concerned. Base: Total respondents answering. Denotes a significant difference. 10

11 Retirement Concerns 2008/2011 Retired Fewer retired members express concern, across all measures, in 2011 vs Rating % 54% 47% 57% 42% 46% 46% 37% 2 Being able to afford medical expenses (N=564/N=2154) CalSTRS will have sufficient funds to pay benefits (N=575/N=2162) Being able to maintain standard of living throughout retirement (N=575/N=2176) Social Security will have sufficient funds to pay benefits (N=413/N=1652) Q8 (R). The following are some financial concerns you may have regarding your retirement. Please rate your level of concern. Scale: 1=Not at all Concerned; 10=Extremely Concerned. Base: Total respondents answering. Denotes a significant difference. 11

12 Sources of Health Insurance 2008/2011 Active Employer-Paid Health Insurance More than one-third of active members remain unaware of the post-retirement insurance coverage available through their current employer. Active 2008 (N=590) 2011 (N=3788) Employer will pay the full cost for lifetime 11% 1 Employer will pay the full cost until reach age 65 and then will pay the full cost 11% 12% Employer will pay the full cost until reach age 65 and then will share the cost with employer 6% 7% Will share the cost with employer 6% 5% Will receive some level of employer-paid health insurance through other means 6% 6% Intend to remain employed for health coverage N/A 1% Will have to pay the full cost of health insurance in retirement 22% 1 Do not expect to have health insurance N/A 14% Do not know coverage employer offers 37% 35% Q23 (A). Do you expect to have employer-paid health insurance in retirement? Base: Total respondents answering. Denotes a significant difference. 12

13 Awareness of Provisions and Offsets 2008/2011 Active In 2011, more than half of active members are unaware if the Windfall Elimination Provision and Government Pension Offset will affect them % 54% 56% 55% 42% 44% 29% 29% 17% 16% N/A N/A Yes No Don't know Yes No Don't know Windfall Elimination Provision (N=576/N=3820) Government Pension Offset (N=564/N=3747) Note: The 2011 results cannot be compared to 2008 because the Don t Know response was not presented as an option for Q20 (A). As a member of CalSTRS you do not pay into Social Security. As a result, when you retire and receive a CalSTRS retirement benefit your Social Security benefits may be subject to certain offsets. Please indicate whether or not you are aware of the following offsets. Base: Total respondents answering. 13

14 Impact of Provisions and Offsets 2008/2011 Retired In 2011, one-third of retired members are unsure if the Windfall Elimination Provision and Government Pension Offset will affect them % 5 22% N/A 44% 33% 31% 56% 36% 33% Yes No Don't know Yes No Don t know Windfall Elimination Provision (N=248/N=1261) N/A Government Pension Offset (N=234/N=1176) Note: The 2011 results cannot be compared to 2008 because the Don t Know response was not presented as an option for Q14 (R). As a member of CalSTRS you did not pay into Social Security. As a result, if you receive Social Security benefits, these benefits may be subject to certain offsets. Please indicate whether or not your Social Security benefit or spousal benefit is or will be reduced by the following offsets. Base: Respondents who receive/will receive Social Security retirement benefits answering. 14

15 Awareness of Medicare Part A Eligibility Active and Retired Nearly a third of active members expect they will be responsible for their own Medicare Part A premiums. More than half of active members and almost one-third of retired members (under age 65) do not know if they qualify for premium-free Medicare Part A. 10 Expect to Pay Medicare Part A Out of Pocket Active (N=3890) Retired (N=506) % 42% 29% 58% 29% 2 11% Yes No Don't know Q21 (A)/Q12 (R). (If under 65) Do you expect to have to pay out of pocket for Medicare Part A premiums, once you are eligible? Base: Total respondents answering. Denotes a significant difference. 15

16 Summary of Findings Supplemental retirement savings Continue education and encourage supplemental savings Funding status of CalSTRS Continue education efforts to boost member confidence Continue to embrace alternative communication media to reach members Health insurance in retirement Encourage members to learn what their employer offers Social Security offsets More education and outreach about the offsets and their potential impact to members Medicare Part A awareness More education to encourage members to learn about their eligibility 16

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