2017 LINCOLN RETIREMENT POWER PARTICIPANT STUDY

Transcription

1 RETIREMENT PLAN SERVICES 2017 LINCOLN RETIREMENT POWER PARTICIPANT STUDY Struggling to Juggle: Compe>ng financial priori>es squeeze re>rement savers Conducted by Lincoln Financial Group with Greenwald & Associates Media contact: Kelly DeAngelis Products issued by: The Lincoln Na>onal Life Insurance Company Lincoln Life & Annuity Company of New York LCN Lincoln Na>onal Corpora>on 1

2 SAVINGS ARE UP FROM PRIOR YEARS ReGrement Plan Account Value: $250K+ $500K+ 23% % of ParGcipants who Increased ContribuGons During the Past Year 17% Increased contribu>ons once during the past year 10% 7% 10% Increased contribu>ons more than once during the past year Did not increase contribu>ons during the past year 4% % 52% 20% Ques%on: Which of the following best describes the account value of your re%rement plan at work? Ques%on: Thinking about your re%rement plan and your plan provider, about how o?en would you say you did each of the following last year? Increased the amount that you contribute to the plan LCN

3 OVERALL, ABOUT TWO IN TEN MAX OUT THEIR CONTRIBUTION Amount Contributed to Plan (If employer offers match) Amount Contributed to Plan: 2017 (If employer doesn t offer match) The maximum you're allowed to contribute to the plan More than your employer matches, but less than the max The total your employer will match, but no more Less than the total your employer will match The maximum you're allowed to contribute to the plan 33% 17% Less than the maximum you are 13% allowed to contribute to the plan 15% Not sure 8% 36% 36% 38% Don t know 2% 4% 2% 12% 16% 11% 32% 31% 34% Ques%on: Which one of the following best describes the amount you contribute to the plan? 16% 16% 37% 34% 59% Amount Contributed to Plan: 2012 & 2015 (If employer doesn t offer match) The maximum you're allowed to contribute to the plan More than a modest amount, but less than the maximum you are allowed to contribute to the plan Just a modest amount 47% 49% LCN

4 SPIRITS ARE UP FROM PRIOR YEARS EmoGons about ReGrement Savings Op>mis>c Confident Anxious Overwhelmed Excited Scared Indifferent Confused Angry 3% 2% 2% 8% 19% 17% 14% 13% 18% 21% 13% 11% 15% 11% 13% 14% 26% 24% 29% 30% 31% 35% 39% 41% 51% 45% % 69% Any posi>ve emo>on 51% Any nega>ve emo>on 20% Both posi>ve and nega>ve Ques%on: Which of the following best describes the way you feel when you think about your re%rement savings? Please select the TWO that describe you best. LCN

5 MANY PARTICIPANTS RECOGNIZE THE NEED TO SAVE AT LEAST 10-15% OF THEIR INCOME Actual Deferral Rate and Rate ParGcipants Think they Need to Save to be on Track Actual deferral rate Deferral needed to be on track 5% or less 7% 26% 6% to 9% 10% to 14% 15% to 19% 10% 12% 18% 20% 21% 17% Median 10% 15% 20% to 24% 8% 12% 25% or more 9% 16% Don t know 7% 17% Ques%on: Approximately what percentage of your salary did you contribute to the plan last year? Ques%on: What percentage of your salary do you think you need to save in your workplace re%rement plan in order to be on track with saving for re%rement? LCN

6 SIX IN TEN PARTICIPANTS FEEL THEY ARE CONTRIBUTING LESS THAN IS NEEDED TO BE ON TRACK ParGcipant ContribuGons vs. ContribuGon Rate ParGcipants Think they Need to Save to be on Track Contribu>ng less than what they think they need to save to be on track Contribu>ng exact amount they think they need to save to be on track Contribu>ng more than what they think they need to save to be on track 30% 10% 60% 19% 40% Would need to increase deferral rate by 5% or more to be saving what they think they need to save to be on track Would need to increase deferral rate by 1%-4% to be saving what they think they need to save to be on track Ques%on: Approximately what percentage of your salary did you contribute to the plan last year? Ques%on: What percentage of your salary do you think you need to save in your workplace re%rement plan in order to be on track with saving for re%rement? LCN

7 MOST SIMPLY CAN T AFFORD TO SAVE MORE. RELATEDLY, FOUR IN TEN SAY OTHER FINANCIAL GOALS GET IN THE WAY Reasons for Not ContribuGng More (Of those contribuang less than needed) You cannot afford to save more 59% You have other financial goals that are more important 38% You are concerned about not being able to access the money un>l you re>re You chose to invest elsewhere 14% 17% Your spouse/partner contributes to his or her plan, so you feel you don t have to contribute more to yours The plan you are offered is not a good plan You do not like the investment op>ons offered in the plan Other Don t know 9% 6% 5% 6% 2% Ques%on: Which of the following are reasons why you do not contribute more to your workplace re%rement plan? (Among those who contribute less than the percentage they think they need to save to be on track) LCN

8 RETIREMENT SAVERS OF ALL AGES FACE COMPETING PRIORITIES CompeGng PrioriGes by Age 3+ compe>ng priori>es 5+ compe>ng priori>es 7+ compe>ng priori>es 85% 89% 84% 52% 52% 52% 77% 40% 65% 21% 21% 16% 9% 20% 3% Age of Par>cipant Ques%on: Which of the following types of debt do you have? Ques%on: Besides re%rement, which of the following are you currently saving towards? LCN

9 NEARLY SIX IN TEN SAY THEIR DEBT IS A PROBLEM Types of Debt Possessed Mortgage Credit card debt 49% 59% Current Level of Debt (If has debt) A major problem 13% Car loan Student loans (for yourself) Student loans (for a spouse, child, or other family member) 14% 11% 49% 22% Has any student loan debt Not a problem 42% 58% A Problem Other 3% A minor problem 45% You do not have any debt 15% Ques%on: Which of the following types of debt do you have? Ques%on: Thinking about your current financial situa%on, how would you describe your level of debt? LCN

10 SIX IN TEN OF THOSE WITH STUDENT LOANS SAVE LESS BECAUSE OF THEIR DEBT; MILLENNIALS ARE ESPECIALLY IMPACTED Presence of Student Loan Debt by GeneraGon 43% 32% 19% 10% 9% Younger Millennials Older Millennials Gen Xers Younger Boomers Older Boomers Impact of Student Loan Debt on Savings Strongly agree Somewhat agree Neither agree nor disagree Somewhat disagree Strongly disagree I am saving less than I want to because of student loan debt 26% 33% 20% 12% Ques%on: To what extent do you agree with the following statement: I am saving less than I want to because of student loan debt (among those who currently have student loan debt) Ques%on: Which of the following types of debt do you have? LCN

11 ABOUT HALF OF PARTICIPANTS HAVE THREE OR MORE SAVINGS GOALS OTHER THAN RETIREMENT Current Savings Goals Other than ReGrement Vaca>on or travel 59% An emergency fund 48% Home improvements To buy a car Future healthcare expenses 23% 22% 39% 57% Saving for an emergency or future healthcare expenses To buy a house 21% College/educa>on (for other family member) A wedding College/educa>on (for yourself) Other 8% 4% 2% 19% 22% Saving for college or educa>on expenses for themselves or a family member None 9% Ques%on: Besides re%rement, which of the following are you currently saving towards? LCN

12 ONE-FIFTH PROVIDE CAREGIVING OR FINANCIAL SUPPORT TO AN ADULT FAMILY MEMBER Provide Care or Financial Support for Adult Family Member Currently provide unpaid care (e.g., help with transporta>on, medica>ons, or physical help) 12% 20% Currently provide care and/or financial support Currently provide financial support (either direct financial support or financial support for their care) 11% Ques%on: Do you currently provide any unpaid care or financial support for your parent(s) or another adult family member? LCN

13 COMPETING PRIORITIES ARE A KEY ROADBLOCK TO SAVING Impact of CompeGng PrioriGes on ParGcipant Deferral Rates # of Compe>ng Priori>es: 0 to 2 3 to 4 5 to % Contributes 10%+ 36% 49% 47% Contributes 15%+ 40% 30% 24% 19% 27% Contributes less than what they think they need to save to be on track 46% 59% 59% Ques%on: Which of the following types of debt do you have? Ques%on: Besides re%rement, which of the following are you currently saving towards? Ques%on: Approximately what percentage of your salary did you contribute to the plan last year? Ques%on: What percentage of your salary do you think you need to save in your workplace re%rement plan in order to be on track with saving for re%rement? LCN

14 DEBT AND UNEXPECTED EXPENSES ARE TOP REASONS FOR LOANS Taken a Loan from ReGrement Plan No 64% 24% Took a Loan Yes, and you took the loan 24% Yes, but you did not end up taking a loan 12% Why Loan Was Needed (Among those who took loan) Paying off debt An unexpected necessary expense (such as a medical bill or car repair) A major purchase (such as a new home or car) To pay for day-to-day expenses/make ends meet during a difficult financial period A discre>onary expense (such as a vaca>on, wedding, or home renova>on) 14% 33% 29% 29% 25% To pay for educa>on-related expenses (your own or someone else's) 12% Other 4% Ques%on: Have you ever taken or considered taking a loan from your re%rement plan? Ques%on: What did you use the money from the loan for? (Among those who took a loan from their re%rement plan) LCN

15 MEDIAN SAVINGS RATES ARE SIGNIFICANTLY HIGHER AMONG PARTICIPANTS WHO SET GOALS Median Deferral Rates Among ParGcipants Who Set Goals vs. ParGcipants Who Do Not Median Deferral Rate Par>cipants who have a specific goal for how much they want to save for re>rement this year Par>cipants who do not have a goal for how much they want to save for re>rement this year Par>cipants who have a specific goal for how much debt they want pay down this year Par>cipants who do not have a goal for how much debt they want to pay down this year 12% 6% 10% 7% Ques%on: Approximately what percentage of your salary did you contribute to the plan last year? Ques%on: For which of the following have you established a specific goal? The amount of money you will set aside as re%rement savings this year Ques%on: For which of the following have you established a specific goal? The amount of debt you will pay off this year (Among those who have debt of any kind) LCN

16 CONFIDENCE ABOUT VARIOUS ASPECTS OF RETIREMENT IS SIGNIFICANTLY HIGHER AMONG THOSE WHO SET GOALS Confidence about Various Aspects of ReGrement Have specific goal for re>rement savings this year Have specific goal for debt repayment this year No goal for re>rement savings this year No goal for debt repayment this year Extremely or very confident about being able to accumulate enough money so they can re>re when they want to 14% 24% 49% 56% Extremely or very confident about being able to convert their savings into income that will last through the rest of their lives 17% 20% 46% 56% Extremely or very confident about having enough money to maintain the lifestyle they want in re>rement 11% 19% 50% 60% Extremely or very confident about all three of the above 6% 11% 38% 46% Ques%on: How confident are you about being able to accumulate enough money so you can re%re when you want to? Ques%on: How confident are you about being able to convert your savings into income that will last through the rest of your life? Ques%on: How confident are you about having enough money to maintain the lifestyle you want in re%rement? LCN

17 METHODOLOGY This report presents the results of an online survey conducted by Greenwald & Associates on behalf of Lincoln Re>rement Plan Services. The study, which is in its third itera>on, was previously fielded in 2015 and The purpose of the study is to gain insight into how re>rement plan par>cipants view their plans and interact with their plan providers. The research also explores how par>cipants make decisions about their plans, what mo>vates their choices, how planning impacts saving, and the compe>ng priori>es that many par>cipants face. Informa>on for this study was gathered through 18-minute online interviews with a total of 2,509 full->me workers ages 21 to 70 who have been contribu>ng to their current employer s re>rement plan for at least one year. Respondents for the survey were recruited through the ResearchNow online panel. Online interviewing took place from February 1 to February 16, Quotas were established by genera>on and for par>cipants of certain ethnic/racial backgrounds to ensure comparability and representa>veness. The data are weighted by gender, age, race/ethnicity and educa>on to reflect the total popula>on of full->me employees in a re>rement plan. If this study were a random survey of 2,509 employed individuals in a re>rement plan, it would have a margin of error (at the 95% confidence level) of plus or minus about 2 percentage points. LCN

18 ABOUT LINCOLN RETIREMENT POWER Established in 2010, Re%rement Power is a platorm for research and viewpoints on central issues related to re>rement planning. The program seeks to iden>fy forward-thinking ways to help plan sponsors, advisors, intermediaries and par>cipants. As part of the program, Lincoln sponsors both proprietary and third party research with an emphasis on what drives beuer re>rement outcomes. LCN

19 ABOUT LINCOLN FINANCIAL GROUP Lincoln Financial Group provides advice and solu>ons that help empower people to take charge of their financial lives with confidence and op>mism. Today, more than 17 million customers trust our re>rement, insurance and wealth protec>on exper>se to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marke>ng name for Lincoln Na>onal Corpora>on (NYSE:LNC) and its affiliates. The company had $241 billion in assets under management as of June 30, Learn more at: Find us on Facebook, Twiuer, LinkedIn, and Instagram. To sign up for alerts, please visit our Newsroom at hup://newsroom.lfg.com. LCN