RESULTS OF THE 2012 STATE FAIR SURVEY OF RETIREMENT AND LONG-TERM CARE Background Since 1998, the Minnesota Board on Aging and the Department of Human Services have sponsored a periodic survey of state fairgoers at the Minnesota State Fair. The purpose of the survey is to get a snapshot of the retirement and long-term care concerns and plans from a sample of Minnesotans. Over 25% of all Minnesota s population attends the annual Minnesota State Fair, one of the largest in the country. It is held for 12 days at the end of August concluding on Labor Day each year. Those who attend represent all parts of Minnesota, all incomes, all ages, occupations and communities. This provides an opportunity to take the pulse of Minnesotans on these important issues. It is not intended to be a survey that meets all the criteria of a methodically stringent survey, but rather it provides a snapshot of current thinking of Minnesotans on their retirement and long-term care. The sponsors use the results of the survey to determine how concerns and behavior are changing over time regarding the critical issues of retirement preparation and long-term care plans, and how these trends should influence public information and outreach efforts so they are more effective. Since 1998, the survey has been administered six times 1998, 2003, 2005, 2009, 2011 and 2012. For most of these years, the survey was administered to individuals visiting the Ramberg Senior Center at the fair (where the Minnesota Board on Aging booth was located). Beginning in 2011, the survey has been administered to individuals in the Education Building, at the MBA booth there. The Education Building is one of the most visited buildings at the Fair, providing booths for many public and private colleges and universities, nonprofit organizations and state agencies. In 2012, staff and volunteers were able to complete surveys of nearly 2,400 individuals, the largest number ever surveyed. Several of the questions on the survey have remained the same throughout the years, although some questions have changed depending upon current trends and the focus of the work being done at that time. Because of the launch of the Dayton/Prettner Solon Administration s Own Your Future initiative in October 2012, the sponsors were anxious to get the most up-to-date information on the concerns and plans of Minnesotans especially those between ages 40 and 65. The Own Your Future initiative is a joint federal/state effort whose purpose is to urge individuals to create a plan for their long-term care including how to pay for that care. Minnesota is the 27 th state to initiative this effort since the program began in 2005. The main feature of Minnesota s campaign was the mailing of a letter from the Governor/Lieutenant Governor in early October 2012 to one million households ages 40 to 65, urging them to create a plan for their long-term care and directing them to a special website. 1
The Own Your Future website is at http://mn.gov/ownyourfuture and includes basic information to help people gather information about long-term care, understand their risk of needing long-term care services, and review options for how they can prepare a plan for themselves including how to pay for their care. Questions asked The topic of the survey is retirement and long-term care. The question what is the most important step you have taken to plan for retirement has been asked each year, although this year, the respondent was asked to check one response rather than checking all that apply. The question what is your biggest concern about retirement has been asked in five of the six years. The question what will be your main source of income in retirement has been asked four of the six years. The question if you need care when you get old, how will you pay for it has been asked for the last two years -- 2011 and 2012. The question do you provide care for an ill or disabled family member or did you provide such care was asked the last two years 2011 and 2012. The question have you used the internet to research options that help you plan for long-term care was asked only in 2012. Overall Summary of the 2012 Survey Surveys administered and useable: We completed 2,416 surveys. We have usable data for 2,354 surveys; the SNAP survey software rejected 62 of the scanned surveys. Gender: 1589 Female 747 Male 18 Did not give gender Age: 498 44 and under 578 45-54 872 55-64 393 65 and over 13 Did not give age Living Arrangements: 480 Live alone 1585 Live with spouse/partner 275 Live with others 14 Did not give living arrangements 2
Annual household income: 183 Under $20,000 244 $20,000 - $35,000 356 $35,000 - $50,000 493 $50,000 - $75,000 944 Over $75,000 134 Did not give income Findings Question 1: What is the most important step you have taken to plan for retirement? 37.6% said that saving through their 401K plan is the most important step they have taken to plan for retirement. 17.2% said they have discussed future planning issues with their family or close friends and saw this as the most important step. 16% said that thinking about how they could be active and involved in retirement was their most important step. Others identified setting up their own savings plan (12.5%), writing a will (6.1%), completing a living will/health care directive (5.8%) or purchasing long-term care insurance (4.8%) as their most important steps to plan for retirement. Analyzing the responses to this question by age indicates a great deal of similarity in the proportion of responses. A total of 44% of those under 44 and between 45 54 felt the most important step was saving through a 401K plan; 35.5% of those 55 64 identified their 401K as the most important step, while only 14% of those 65+ mentioned this. More of those 65+ felt purchase of long-term care insurance was an important step (8.6%) compared to the other age groups (1.8% of those under 44, 2.8% of those 45-54, 6.1% of those 55-64). There were several significant differences in the responses by income group. More of those with lower incomes said that thinking about how they will be active and involved in retirement is the most important step they have taken (25.4% for those with incomes less than $20,000 and 23.8% for those with incomes between $20,000 and $35,000) compared to those with incomes over $75,000 (11.4%). 44.2% of those with incomes over $75,000 said that saving through a 401K plan was the most important step, compared to 38.2% for those with incomes between $50,000 and $75,000, 37.4% for those between $35,000 and $50,000, 27,5% for those between $20,000 and $35,000 and 16.2% of those with incomes under $20,000. More of the lower income groups had completed a living will/health care directive and discussed future planning issues with family and friends compared to the higher income groups. Question 2: What is your biggest concern about retirement? The biggest concern for nearly all age groups was losing their health and needing care as they retire. The proportions increased along with age group. About 27.7% of those under 44 identified this concern, as did 42.6% of those between 45 54, 49.0% of those 55 64 and 57.7% of those over 65. 3
Concern about being a burden to their family was relatively small, rising from 6.9% for those under 44, to 12.5% for those 65+. Concern about inability to save for retirement decreased as age increased. As one would expect, 31% of those 44 and under identified this as a major concern, but only 3.1% of those 65+ did. Overall, 29.4% of those responding said inability to maintain previous lifestyle was a major concern, with very small differences across the age groups. Looking at the responses by income group shows similar patterns. The major concern for all income groups (43.7%) was losing their health and needing care. The specific percentages ranged from 32.6% for those with incomes under $20,000, 42.7% for those between $20,000 and $35,000, 39.1% for those between $35,000 and $50,000, 49.6% for those between $50,000 and $75,000 and 44.9% for those with incomes over $75,000. The responses to the concern about being able to save for retirement was definitely tied to income. In this case, 32% of those with incomes below $20,000 felt this was a major concern, 29.7% of those between $20,000 and $35,000 and 23.8% of those with incomes $35,000 to $50,000 felt this was a major concern, only 13.7% for those between $50,000 and $75,000, and 10.5% for those with incomes over $75,000 saw this as a major concern. Only the lowest income group with incomes below $20,000 said a major concern was being a burden on their family, where 14.6% chose this concern. The other income groups all responded below 10%. Question 3: What will be your main source of income in retirement? The responses to this question were very different for the age groups surveyed. Of those age 44 and under, only 9.6% see employer-paid pension plan as the major source of retirement income. This compares to 21.9% of those 65+ who have this as a major source of retirement income. The pattern is reversed for 401K plans. In this case, 42.8% of those 44 and under expect this will be their main source of income, vs. only 9.5% of those 65+, with 36.6% of those 45 54 and 23.7% of those 55 64 expecting this as a major source. Only about 14.8% of those under 44 expect that Social Security will be their main source of retirement income. However, this proportion increases across the older age groups, with 20.6% of those 45-54, 31.5% of those 55 64 and 42% of those 65+ expecting Social Security to play a major role in their retirement income. The pattern is again reversed for income from employment. About 13% of those 44 and under expect employment will be their main source of income, compared to only 4.1% of those 65+ expecting this to be a main source. There are also definite patterns in the responses by income group. Of those with the lowest incomes (under $20,000) a whopping 51.7% expect Social Security to be their main source of income. For those between $20,000 and $35,000, 49.2% think Social Security will be their main source, 34.4% of those between $35,000 and $50,000 think this, 27.9% of those between $50,000 and $75,000 think this will occur and only 14.2% of those with incomes over $75,000 believe that Social Security will be/is their main source of retirement income. Similarly those with lower incomes see employment as a main source of income, ranging from 16.7% for those under $20,000, down to 3.9% for those with incomes over $75,000. Responses to the employer-paid pension and 401K plans show that the higher income group expect these to be their main sources of income (22.9% of those over $75,000 expect employerpaid pensions and 37.1% expect 401K plans to be major sources of retirement income). Contrast 4
that with only 3.3% and 12.2% of those with incomes less than $20,000 who expect to receive employer-paid pensions or 401K plans, respectively. Question 4: if you need care when you get old, how will you pay for it? The most common response (30.5%) to this question was that the individual will use their personal savings and investments to pay for needed long-term care. All age groups responded at about this same level. The next most mentioned source of payment was long-term care insurance at 20%, with the responses increasing with age, to 26% for those 65+. It should be noted that it is estimated that only about 9 percent of adults in Minnesota currently have long-term care insurance. Overall, 12.4% of those responding said they would use a government program to pay for longterm care. Only 6.5% of those under 44 said they would use a government program but 13% to 15% of the rest of the older age groups planned to use a government program. Over 5% of those responding said that their family would take care of them. All age groups were very similar in their response regarding family care. 4.8% of those responding said they would use the equity in their home to pay for long-term care. This started at 1.4% for those under 44, and rose to 6% for the older age groups. The biggest news in the response to this question was the high proportion that said they did not know how they would pay for long-term care. Overall, 27% said they did not know, but 42.5% of those under 44 responded in this way, 27.7% of those 45 54, 23.8% of those 55 64, and 13.8% of those 65+ all said they did not know how they would pay for their long-term care costs. Breaking the responses down by income group reveals patterns that are similar to the age breakdowns. About 30% of those responding said that they will use personal savings and investments to pay for long-term care, with this response increasing as income rose. The proportion of individuals saying they would use long-term care insurance rose from 6.6% for those with incomes under $20,000, up to 28.5% for those with incomes over $75,000. More of those with lower incomes say they would use a government program to pay for long-term care: 17.7% of those with incomes under $20,000, 20.4% for those between $20,000 and $35,000, 12.7% for those between $35,000 and $50,000, 13.5% for those between $50,000 and $75,000, and 9.6% for those with incomes over $75,000. The use of equity in the home is quite similar in all income levels (5.0%), except for the lowest income group, where it is 1.1%. The expectation that the family will care for individuals also fairly consistent across the income levels, from 6.6% for lowest income group to 3.3%, 6.8%, 5.3% and 5.1%, respectively, for the other income groups. Nearly 50% of those with the lowest incomes do not know how they will pay for long-term care costs. This proportion declines as incomes rise, so only 17.1% of those with incomes of $75,000 do not know how they will pay for long-term care. Question 5: do you provide care for an ill or disabled family member? Did you provide care? The proportion of those surveyed who were caring for a family member increased as the age of the respondent increased, until age 65 when it declined. A total of 15.5% said they were currently caring for a family member. Even more of those surveyed indicated that they had cared for a family member in the past. A total of 17% said this was the case. These proportions also went up with age so that a total of 20% of those ages 55-64 and 65+ had cared for a family member. 5
If you add up those currently and previously caring for a family member, the total is 32.5% of those surveyed. Income does not appear to affect the level of caregiving for family members. There were very similar proportions of persons caring for family members at all income levels. Question 6: have you used the Internet to research options that help you plan for long-term care? 28.3% of those surveyed said that they have used the internet to research long-term care options. These proportions rise with age from 18.2% for under 44, to 31.5% for those 65+. Another 22.3% said they plan to research options for long-term care on the Internet. This proportion tends to decline as age increases, from 31% for those 44 and under to 10.3% for those 65+. As to income levels, there seems to be one pattern of use for those with incomes of under $50,000 and another pattern for those with higher incomes. About 15% of those under $50,000 have used the internet for research, and up to 34% of those with incomes over $50,000 have used the internet to research long-term care topics. There does not appear to be any pattern related to income level and plans of those surveyed to use the internet to research long-term care topics. Nearly 50% do not plan to use the internet to research long-term care options. This high percent climbs even higher for those 65+ (58.1%). Some changes occurred between the 2011 and 2012 survey in how respondents plan to pay for their longterm care. More individuals plan to use personal savings (from 27 to 30 percent), fewer plan to use a government program (16 percent down to 12 percent), about the same percent expect to use long-term care insurance (20%) and more individuals don t know how they will pay (from 25 to 27 percent). What are the implications of these results for the activities of the Own Your Future initiative? It is important to keep in mind that this survey is a snapshot of what Minnesotans visiting the State Fair Education building think about their retirement and long-term care options. It is not intended to be a scientific sample survey that carefully controls the sample asked to complete the survey. That said, it does give us broad impressions about what concerns people are thinking about and what their retirement and long-term care plans are. Messages 1. People understand that both financial and health elements are important factors in preparing for retirement and long-term care needed in their later years. 2. The largest concerns that people have regarding retirement are losing their health and needing care, and being unable to maintain their previous lifestyle. 3. The two major sources of retirement income for most people will be either their 401K plan and/or Social Security. 4. Many people plan to use their personal savings/investment income to pay for long-term care, but about the same proportion doesn t know how they will pay for these costs. 6
5. One-third of all those completing the survey are currently caregiving for an ill or disabled member of their family, or did provide care in the past. 6. One-half of those surveyed said they have used or plan to use the internet to research long-term care options. The other half said they have not used the internet for this purpose and do not plan to do so. 7