O C T O B E R MassMutual Retirement Savings & Household Income Study

O C T O B E R 2 0 1 7 MassMutual Retirement Savings & Household Income Study

Background and Methodology Study Objectives To raise awareness of the threats and obstacles to middle class workers long-term financial security, specifically their retirement savings habits and retirement security needs. Survey of Middle Income Americans An online survey of Middle Income Americans through Research Now s panel was conducted by Greenwald & Associates on behalf of MassMutual. The survey was conducted from February 28 to March 14, 2017. To qualify, respondents needed to be between the ages of 25 and 65, work full-time, have a household income between $35k and $150k, and have considerable influence when it comes to making financial and employee benefit decisions. Of the 1,010 workers who participated in the survey, 150 currently make between $35k and $44k, 503 make between $45k and $74k, and 357 make between $75k and $150k. The margin of sampling error at the 95% confidence level is plus or minus 3.1%. The data is weighted by race, age, and gender to reflect the composition of the United States middle class. Percentages in the tables and charts may not total to 100 due to rounding and/or missing categories. 2

A quarter of plan participants save at least ; one in ten are saving 15% or more 401(k) Retirement Savings Plan or Similar Defined Contribution Retirement Plan Percentage of Income Saved Have/Participate Do not have/participate 89% 86% 86% 92% 13% 1 8% 0% 1% to 5% to 9% to 1 15% or more Not sure 2% 2% 5% 1% 23% 47% 23% 19% 43% 36% 41% 46% 18% 1 16% 21% 3% 11% 3% <0.5% 3% And w hich of these retirement benefits do you currently have or participate in through your employer? ( n=829; n=120; n=407; n=302) What percentage of your income do you personally save in your w orkplace retirement savings plan? Filter: If participating in plan ( n=740; n=101; n=355; n=284) 3

Of those not participating, a quarter can t afford it and a similar share don t find the employer contribution compelling 401(k) Retirement Savings Plan or Similar Defined Contribution Retirement Plan Have/Participate Do not have/participate Top Reasons Not to Contribute (note: small sample size on subgroups) 26% 89% I cannot afford to save for retirement 18% 70% 23% 86% 13% The employer match/contribution is not compelling enough/there is no employer match 23% 22% 11% 35% 1 86% 1 I prefer manage my money directly 2 13% 13% 92% 8% I prefer to save in a way where the money is more accessible in case I need it 1 22% 21% And w hich of these retirement benefits do you currently have or participate in through your employer? ( n=829; n=120; n=407; n=302) Why are you not contributing money to your employer s retirement savings plan? Please select all that apply. Filter: If not participating in plan ( n=87; n=18; n=52; n=17) 4

For all income levels, about six in ten say their employer offers a matching contribution 401(k) Retirement Savings Plan or Similar Defined Contribution Retirement Plan Offered to employees Not offered to employees Employer Contribution 61% 81% 17% My employer offers a matching contribution 60% 56% 6 30% 77% 22% My employer offers a fixed contribution 2 32% 30% 9% 79% 16% My employer does not offer any contribution 8% 11% 7% 82% 16% Not sure 9% 3% Which of the follow ing retirement benefits does your employer currently offer to you, regardless of w hether or not you participate? ( n=1,010; $35k to $44k n=150; n=503; n=357) Does your employer contribute money to your w orkplace retirement savings plan? (Please select all that apply) Filter: If plan is offered ( n=829; n=120; n=407; n=302) 5

About four in ten say their employer contributes at least 5% of their income to their workplace plan Income Percentage Employer Contributes to Workplace Retirement Plan 2% or less 3% 5% 6% 13% 19% 12% 12% 21% 20% 21% 21% 1 11% 1 1 21% 27% 16% 22% 8% 11% 7% or more 3% 12% A fixed dollar amount Not sure 1% 0% <0.5% 2% 11% 11% 1 8% About w hat percentage of your income does your employer contribute to your w orkplace retirement savings plan? Filter: If employers offers contribution ( n=707; n=98; n=346; n=263 6

Nine in ten of the upper-middle class meet or exceed the match. Only two-thirds of lower income workers say the same, although many are unsure. Saving Enough to Obtain Full Matching Contributions $35k to $45k 23% 67% 8% 8% 8 11% 12% 77% Men are more likely to meet or exceed the match (89% vs. 77%). Yes No Not sure 5% 90% Do you save enough money in your w orkplace retirement savings plan to receive the full matching contribution offered by your employer? Filter: If employers offers a matching contribution ( n=485; n=63; n=231; n=191) 7

Six in ten of those with a working spouse have access to a retirement plan through the spouse s employer Spouse/Partner 401(k) Retirement Savings Plan or Similar Defined Contribution Retirement Plan Yes No Not sure Percentage of Income Saved 58% 45% 50% 62% 32% 27% 27% 41% 28% 9% 0% 1% to 5% to 9% to 1 15% or more Not sure 7% 6% 20% 29% 2 18% 32% 36% 25% 3 17% 21% 21% 15% 0% 21% 15% 17% 23% Does your spouse s/partner s current employer offer a 401(k) or similar retirement savings plan, such as a tax-deferred annuity or 403(b), 457, or thrift savings plan, regardless of whether or not they contribute to that plan? Filter: Spouse/Partner works full or part time ( n=517; n=45; n=218; n=254) What percentage of your income does your spouse/partner save in their workplace retirement savings plan? Filter: If spouse/partner participates in plan ( n=291; n=18; n=109; n=164) 8

Half of middle class workers have retirement savings outside an employer plan. Six in ten of those who do use an IRA. Money Saved Outside Employer-Sponsored Retirement Plan Yes No Not sure Ways to Save 52% 45% 3% Through a traditional or Roth individual retirement account (IRA) 58% 38% 53% 63% 58% 35% 61% In a checking or savings account 65% 51% 60% 46% 49% 6% Other investment vehicles: life insurance, bonds, annuities, stocks, real estate, mutual funds, CDs 48% 41% 42% 51% 60% 39% Some other way Do you (and your spouse/partner) save any money for retirement outside of an employer-sponsored retirement savings plan? ( n=1,010; n=150; n=503; n=357) How are you (and your spouse/partner) saving money for retirement outside of an employer-sponsored retirement savings plan? (Please select all that apply) Filter: If saving money outside employer-sponsored retirement plan ( n=518; n=55; n=238; $75k to $150k n=225 1% 1% 2% <0.5% 9

Only a third of workers have been saving for retirement for more than 15 years Length of Time Saving Money Not surprisingly, those making $75k to $150k, older generations, those with assets higher than $100k, and those who feel financially secure are the ones who have been saving money for more than 15 years. Less than one year 1-5 years 6-10 years 11-15 years More than 15 years Don't recall 2% 3% 1% 3% 12% 23% 29% 28% 19% 25% 27% 26% 2 13% 12% 11% 15% 32% 19% 27% 37% For how long have you been saving money for retirement? Filter: If currently saving ( n=855; n=114; n=419; n=322) 10

Only a quarter are offered financial education or planning at work. Retirement planning is the most common of these services provided Financial Education or Planning Offered to employees Not offered to employees Top Benefits Offered 26% 2 2 2 55% 5 5 55% Retirement planning Investment advising for your retirement plan Healthy living or lifestyle planning Budgeting assistance Financial priorities advising Debt counseling College saving advice 25% 19% 21% 28% 25% 15% 22% 28% 2 22% 18% 27% Which of the follow ing employee benefits does your employer currently offer to you, regardless of w hether or not you participate? ( n=1,010; n=150; n=503; n=357) What sort of financial education or planning benefits does your employer offer? (Please select all that apply) Filter: If financial education/planning is offered ( n=258; n=41; n=118; n=99) 7% 16% 22% 28% 67% 67% 61% 69% 5 47% 46% 60% 53% 3 45% 59% 11

Three in ten wish their employer offered retirement planning, regardless of income level Top Desired Financial Education or Planning Benefits Retirement planning Wills and estate planning Investment advising for your retirement plan Social Security counseling Debt counseling 30% 33% 29% 30% 2 18% 20% 28% 22% 2 20% 22% 18% 16% 17% 19% 15% 22% 15% 13% Which of the follow ing financial education or planning benefits do you w ish your employer w ould offer you as part of your benefits package? (Please select all that apply) ( n=1,010; n=150; n=503; n=357) 12

Study Demographics *=<0.5% Gender (n=1,010) (n=150) (n=503) (n=357) M ale 56% 5 56% 56% Female 44 46 44 44 Do you consider yourself to be Heterosexual or straight 91% 8 90% 93% Gay 4 6 5 3 Bisexual 3 7 2 2 Lesbian 1 * 1 1 Prefer not to say 2 2 2 1 Do you consider yourself to be transgender or transsexual? Yes 2% 2% * No 98 98 96 99% Prefer not to say * 1 * * Age 25 to 34 27% 30% 29% 25% 35 to 44 25 24 25 26 45 to 54 26 25 25 27 55 to 65 22 20 21 22 13

Study Demographics *=<0.5% Are you of Hispanic, Spanish, Latino origin or descent? (n=1,010) (n=150) (n=503) (n=357) Yes 17% 20% 18% 15% No 83 80 81 84 Prefer not to answer * -- 1 * Racial Background Non-Hispanic Caucasian 68% 56% 66% 71% Hispanic 17 20 18 15 Non-Hispanic African-American 9 19 9 7 Non-Hispanic Asian 5 4 4 5 Non-Hispanic Other 1 -- 1 * Prefer not to answer 1 1 1 1 [If Hispanic] Were you (n=76) (n=13) (n=40) (n=23) I was born outside of the U.S. 20% 38% 1 21% I was born in the U.S., and at least one of my parents was born outside of the U.S. I was born in the U.S., and both of my parents were born in the U.S. 32 40 46 21 44 22 40 52 Not sure -- -- -- -- Prefer not to say 4 -- -- 7 14

Study Demographics *=<0.5% Current Employment Status (n=1,010) (n=150) (n=503) (n=357) Employed full time 100% 100% 100% 100% Employed part time -- -- -- -- A homemaker -- -- -- -- Retired -- -- -- -- Self-employed -- -- -- -- Disabled and unable to work -- -- -- -- Unemployed or temporarily laid off -- -- -- -- A full-time student -- -- -- -- [If married/partner] Spouse s/partner s Employment Status (n=618) (n=59) (n=273) (n=286) Employed full time 81% 72% 70% 86% Employed part time 6 3 11 4 A homemaker 5 5 6 5 Retired 3 -- 5 3 Disabled and unable to work 2 11 3 1 Self-employed 2 1 4 1 Unemployed or temporarily laid off 1 7 1 -- A full-time student * -- * * 16

Study Demographics Household Income (n=1,010) (n=150) (n=503) (n=357) $35,000 to $44,999 100% -- -- $45,000 to $54,999 12 -- 37% -- $55,000 to $64,999 12 -- 38 -- $65,000 to $74,999 8 -- 25 -- $75,000 to $99,999 27 -- -- 47% $100,000 to $149,999 30 -- -- 53 M arital Status M arried 61% 29% 48% 7 Single, never married 19 33 27 12 Divorced or separated 10 23 14 6 Not married, but living with a partner/significant other 7 12 8 6 Widowed 2 2 3 2 Level of Education High school graduate or less 16% 21% 21% 12% Some college/trade or technical school 43 57 44 39 College graduate (4-year degree) 27 16 24 31 Graduate or professional degree 14 6 11 18 17

Study Demographics Region (n=1,010) (n=150) (n=503) (n=357) South 33% 26% 39% 31% M idwest 26 30 24 28 Northeast 21 19 19 22 West 20 25 19 19 Savings Less than $1,000 7% 19% 3% $1,000 to $4,999 8 16 9 6 $5,000 to $9,999 7 11 10 4 $10,000 to $49,999 20 35 24 16 $50,000 to $99,999 18 5 20 19 $100,000 to $249,999 14 4 12 18 $250,000 to $499,999 10 3 4 15 $500,000 to $999,999 5 -- 1 7 $1 million or more 2 -- * 4 Not sure 2 3 3 1 Prefer not to say 7 5 7 7 *=<0.5% 18

Study Demographics Household Income (n=1,010) LGBT (n=504) Hispanic (n=513) African American (n=492) $35,000 to $44,999 16% 15% 1 $45,000 to $54,999 12 24 16 14 $55,000 to $64,999 12 15 13 14 $65,000 to $74,999 8 12 11 11 $75,000 to $99,999 27 17 24 26 $100,000 to $149,999 30 17 22 21 M arital Status M arried 61% 23% 5 4 Single, never married 19 44 20 29 Divorced or separated 10 9 10 14 Not married, but living with a partner/significant other 7 23 13 11 Widowed 2 1 2 2 Level of Education High school graduate or less 16% 19% 16% Some college/trade or technical school 43 42 61 50 College graduate (4-year degree) 27 27 14 22 Graduate or professional degree 14 21 5 12 19