|[October 09, 2013]
Fidelity® Study Finds Older Higher Ed Faculty Confident in Their Retirement Savings, but Few Have Taken Action to Plan Income Strategy
BOSTON --(Business Wire)--
Investments®, a leading provider of workplace retirement plans in
the not-for-profit higher
education market, today released the latest findings from its Higher
Education Faculty Study1, revealing that while eight in
10 (82 percent) pre-retiree faculty members (age 55+) are confident they
will have enough money to live comfortably in retirement, only 17
percent have taken action to create a retirement income plan. This lack
of planning could result in faculty members nearing the common
retirement age of 65 being less inclined to retire, as well as
unprepared for long-term expenses and turning their assets into regular
income. The promising news: They recognize the need for guidance.
Majority of Older Faculty in Need of Retirement Guidance
Fidelity finds that three-quarters (75 percent) of pre-retiree faculty
report needing some form of financial guidance. They are asking for help
in developing a retirement income plan (31 percent), choosing specific
investments (36 percent) and assessing an overall financial plan (30
"Having confidence in their retirement savings may result in faculty
members who are approaching retirement age not taking the time to create
a retirement income plan, leaving them without a strategy to convert
savings into lasting income," said Rick Mitchell, executive vice
president, Tax-Exempt Retirement Services, Fidelity Investments. "It's
critical that pre-retirees understand how long-term savings can be
transitioned into retirement income. Higher education employees value
education and the opportunity to learn, so it's no surprise that they
are asking for help."
Employees of all ages should have an investment plan in place and while
older faculty are nearly twice as likely to have a formal investment
plan than a retirement income plan, there is still a need to increase
the number of faculty who have both plans. Similarly, younger faculty
(age 54 and under) are also falling short in this area, with only 17
percent having a formal investment plan in place. Not surprisingly, 61
percent of younger faculty report they often worry about their financial
When it comes to getting help from financial professionals, older
faculty are more likely than their younger colleagues to rely on
guidance from an advisor or an investment center representative (59
percent versus 37 percent). In fact, 47 percent of pre-retiree faculty
report working with a financial advisor, compared to just 29 percent of
their colleagues under age 55.
All Generations Must Consider Long-Term Planning
When considering future medical expenses, such as day-to-day health
care, the study finds that 81 percent of older faculty are confident
they can cover these costs. However, when it comes to planning for
long-term care expenses - such as those associated with assisted living
- pre-retiree faculty have less confidence, with only 54 percent
confident they will have enough money to pay for them. On the flip side,
younger faculty are more focused on short-term expenses, such as paying
daily living expenses (26 percent), than they are about long-term
financial goals, like saving for retirement (21 percent). As it relates
to other long-term planning, only 52 percent of younger faculty are
confident they can pay for future medical expenses.
There's an expectation among pre-retiree faculty that long-term health
care benefits will be provided by their employer. In fact, 72 percent
say it's important for an institution-sponsored faculty retirement
program to include retiree health care benefits. Of the older faculty
members who currently have an institution-sponsored retirement incentive
program, 60 percent think it's important to the health of their
institution, and 83 percent agree they would appreciate it if their
institution offers assistance for the transition to retirement. Compared
to their older peers, an even greater number of younger faculty (84
percent) report that retiree health care benefits are the most important
feature for an institution-sponsored retirement program.
"Younger higher education employees are less likely to have access to
fully funded, employer-sponsored retiree medical benefits, as well as
pension benefits," said Mitchell. "It's critical for employees of all
ages to address their retirement readiness by preparing now for the
financial demands they may experience in retirement. While older faculty
members are approaching retirement sooner, financial planning needs to
be top of mind for younger faculty too."
Retirement Planning Tools and Resources for Higher Education Employees
To address retirement readiness, Fidelity offers Retirement Transition
Services, a new offering within its Plan for Life participant
experience, to help pre-retiree employees address complex health and
wealth decisions such as: how to create a lasting retirement income and
how to find and pay for quality health care coverage. Plan for Life
helps employees at all career stages address topics that matter most to
Fidelity's wide variety of resources to help higher education employees
plan and save for retirement include:
Access to investment professionals on-site at the workplace, by phone,
online or at 182
Investor Centers nationwide.
Comprehensive guidance on retirement and personal savings options.
Planning tools and savings calculators to help employees invest,
manage assets and achieve retirement readiness:
Income Planner: For employees within five years of retirement,
this planning tool will help create a comprehensive plan to make
Quick Check: For those employees more than five years
from retirement, this quick check creates a snapshot of retirement
savings progress and offers suggestions to reach those goals.
A short video "Creating
a Retirement Income Plan" designed to encourage older higher
education employees to create a plan to answer important questions:
Can you afford to retire? Will you be able to maintain your lifestyle?
How long will your money last? And two additional videos encourage
higher education employees to take action to save
a series of timely articles that provide analysis of important finance
topics. Specifically, "How
to Tame Retiree Healthcare Costs" outlines steps to take for
effectively planning for health care expenses in retirement, and "Smart
Strategies for Retirement Income," outlines how a mix of
investments can help provide income and growth potential in retirement.
Workshops, educational articles, webcasts and online resources about
Fidelity's Services for the Tax-Exempt Market
Fidelity is the leading retirement plan provider for the not-for-profit
health care market and the second largest provider in higher education.
Fidelity serves more than 4 million plan participants in more than 2,000
workplace savings plans across the not-for-profit market, including
health care, higher education, research, foundations, faith-based, K-12,
and other not-for-profit organizations.
Fidelity's comprehensive suite of 403(b)
retirement services includes plan design resources, recordkeeping
services, consulting and participant communication, education and
guidance. With retirement planning professionals, and a wide array of
tools and resources available to educate plan sponsors, Fidelity helps
employers in the tax-exempt market maximize their retirement benefits
plans and increase employee retirement readiness.
About Fidelity Investments
Fidelity Investments is one of the world's largest providers of
financial services, with assets under administration of $4.2 trillion,
including managed assets of $1.8 trillion, as of August 31, 2013.
Founded in 1946, the firm is a leading provider of investment
management, retirement planning, portfolio guidance, brokerage, benefits
outsourcing and many other financial products and services to more than
20 million individuals and institutions, as well as through 5,000
financial intermediary firms. For more information about Fidelity
Investments, visit www.fidelity.com.
Keep in mind that investing involves risk. The value of your investment
will fluctuate over time and you may gain or lose money.
Guidance provided by Fidelity is educational in nature, is not
individualized and is not intended to serve as the primary or sole basis
for your investment or tax-planning decisions.
IMPORTANT: The projections or other information generated by Fidelity's
Retirement Income Planning Tool and Retirement Quick Check regarding the
likelihood of various investment outcomes are hypothetical in nature, do
not reflect actual investment results and are not guarantees of future
results. Results may vary with each use and over time.
Retirement Income Planner and Retirement Quick Check are educational
Fidelity Investments and Fidelity are registered service marks of FMR
Fidelity Brokerage Services LLC, Member NYSE, SIPC
Salem Street, Smithfield, RI 02917
© 2013 FMR LLC. All rights reserved.
Survey was conducted by Versta Research, an independent firm based
in Chicago, between February 21 and March 6, 2013, among 909
benefits-eligible employees in the United States, including 608
who work at colleges or universities. Respondents were screened
for current employment status, benefits eligibility and for having
at least some involvement in household investment decision-making.
The higher education sample included 224 employees at private
institutions and 384 employees at public institutions, of whom 103
were employed at two-year institutions and 505 were employed at
four-year institutions. Data were weighted on both these
dimensions to reflect the current population of employees
according to 2011 data from the U.S. Department of Labor. Versta
Research is not affiliated with Fidelity Investments.
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