The Principal Financial Well-Being IndexSM Employee and Retiree Comparison Questions - Fourth Quarter 2006
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Employee Financial Well Being
In measuring employees' and retirees' attitudes and perceptions about their financial well-being, a series of different questions were asked. Employees and retirees were asked to identify how much they agreed with some statements relating to how concerned they are about their long-term financial future and how happy they are about their current well-being. As seen in table 1, employees (71%) are significantly more likely to be concerned about their long-term financial future than retirees (50%).
Almost half (48%) of the retirees are extremely happy about their current financial well-being compared to (29%) of the employees. There are significant differences between responses from retirees and employees - indicated with "sig" below. When comparing employee results with last year at this time, there are no statistically significant differences.
Table 1
"Please indicate the extent to which you agree or disagree with each of the following statements."
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| (% of respondents agreeing completely or somewhat) | 4th Qtr 2006 | 4th Qtr 2005 EE |
4th Qtr 2004 EE |
|
| Retiree | EE | |||
| I am very concerned about my long-term financial future. | 50%sig | 71% | 73% | 77% |
| I am extremely happy about my current financial well-being. | 48% sig | 29% | 29% | 34% |
| I have not yet planned for retirement savings/security. | N/A | 28% | 25% | 27% |
| N=630 | N=1197 | N=1,213 | N=1,736 | |
SIG= Significant at the 95% confidence level
sig - varies significantly (95% level) from retiree and employee comparison
Holiday Spending
Employees and retirees were asked about their intentions for spending in the upcoming holiday season. Significantly more employees (9%) than retirees (5%) said they would be spending more money than last year.
Table 2
"During the upcoming holiday season, do you intend to...?"
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| Holiday Spending Intentions | 4 Qtr 2006 Retiree |
4 Qtr 2006 EE |
4 Qtr 2002 EE |
| Spend less money than last year | 36% | 37% | 39% |
| Spend the same amount of money as last year | 60% | 54% | 52% |
| Spend more money than last year | 5%sig | 9% | 8% |
| N=630 | N=1197 | N=2056 |
New Year's Financial Resolutions
Employees and retirees were given a list of potential resolutions and asked which, if any, they intended to make as New Year's resolutions in 2007. The top two resolutions selected by employees were paying off credit card debt (37%) and putting a set amount of money into savings each month (33%). The resolution selected by the most retirees (15%) was to reduce my spending by a specific amount each month. Half (51%) of the retirees responded they don't intend to make resolutions compared to 29% of the employees.
Table 3
"Which of the following, if any, do you intend to make as New Year's resolutions in 2007? Please select all that apply."
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| Financial Resolution | 4 Qtr 2006 Retiree |
4 Qtr 2006 EE |
| Pay off credit card debt. | 13%sig | 37% |
| Put a set amount of money into savings each month. | 12%sig | 33% |
| Reduce my spending by a specific amount each month. | 15%sig | 20% |
| Stop using my credit cards. | 10%sig | 18% |
| Defer more in my defined contribution/401(k) plan. | 1%sig | 14% |
| Work with a financial planner or other financial advisor. | 5% | 7% |
| Other | 4% | 6% |
| None of these | 16%sig | 9% |
| I don't intend to make a resolution. | 51%sig | 29% |
sig - varies significantly (95% level) from retiree and employee comparison
November Elections
Employees and retirees were given a list of issues and asked which they are most concerned about in the November elections. There were significant differences in the results between employees and retirees which are noted in Table 4. The issue that most employees and most retirees said they were concerned about was the war in Iraq. It was selected by three out of five (60%) employees and by four out of five (79%) retirees. Healthcare was listed as a concern by two-thirds of the retirees and a little over half of the employees (53%). There have been significant changes on these issues since they were asked in 2004.
Table 4
"What issues are you most concerned about in the upcoming November 2006 election? Please select all that apply."
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| Issues for Election | 4 Qtr 2006 Retiree |
4 Qtr 2006 EE |
3 Qtr 2004 EE |
| War in Iraq | 79%sig | 60% | N/A |
| Economy/Jobs | 45%sig | 57%SIG | 81% |
| Healthcare | 67%sig | 53%SIG | 71% |
| Taxes | 47% | 47% | N/A |
| My financial well-being | 36%sig | 44%SIG | 58% |
| Homeland Security | 54%sig | 42%SIG | 60% |
| Education | 27%sig | 35%SIG | 45% |
| Other | 10% | 10%SIG | 19% |
| None | 2% | 4%SIG | 1% |
| N=630 | N=1197 | N=1227 |
SIG= Significant at the 95% confidence level
sig - varies significantly (95% level) from retiree and employee comparison
Just over half of the employees and retirees feel their financial well-being will be about the same in the upcoming year if there is a change in Congressional control. Approximately one-quarter of the retirees (27%) and employees (23%) feel it will be worse.
Table 5
"If the November elections result in a change in Congressional control, what do you think the impact will be on your financial well-being in the upcoming year?"
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| Impact on Financial Well-Being | 4 Qtr 2006 Retiree |
4 Qtr 2006 EE |
| Worse | 27% | 23% |
| About the Same | 55% | 54% |
| Better | 19% | 22% |
sig - varies significantly (95% level) from retiree and employee comparison
Financial Professional
A series of questions were asked of employees and retirees regarding financial professionals and personal financial plans. Table 6 shows that 14% of employees and 23% of retirees say they have paid or their employer has paid to have a financial professional develop a personal financial plan for them. Table 7 shows that 62% of the retirees had their plan developed three years ago or more, significantly more than the employee group (32%). Significantly more employees (38%) have had a personal financial plan developed in the past 12 months than retirees (21%).
Table 6
"Have you or your employer ever paid to have a financial professional develop a personal financial plan for you?"
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| Paid a Financial Professional | 4 Qtr 2006 Retiree |
4 Qtr 2006 EE |
4 Qtr 2003 EE |
| Yes | 23%sig | 14%SIG | 20% |
| No | 77%sig | 86%SIG | 80% |
| N=630 | N=1197 | N=1344 |
SIG= Significant at the 95% confidence level
sig - varies significantly (95% level) from retiree and employee comparison
Table 7
"How recently did you have a professional develop your personal financial plan?"
Base: n= 174 employed U.S. Adults and 165 retirees (based on respondents who have had a financial plan developed)
| Used a Financial Professional to Develop Plan | 4 Qtr 2006 Retiree |
4 Qtr 2006 EE |
4 Qtr 2003 EE |
| Within the past 12 months | 21%sig | 38% | 37% |
| More than 1 year, but less than 2 years ago | 14% | 20% | 21% |
| More than 2 years ago, but less than 3 years ago | 3% | 10%SIG | 17% |
| 3 years ago or more | 62%sig | 32% | 25% |
| N=165 | N=174 | N=242 |
SIG= Significant at the 95% confidence level
sig - varies significantly (95% level) from retiree and employee comparison
Two-thirds of retirees (68%) have met with their financial professional since the plan was developed to update the information compared to 41% of the employees.
Table 8
"Have you met your financial professional since the plan was developed to update the information?"
Base: n= 174 employed U.S. Adults and 165 retirees (based on respondents who have had a financial plan developed)
| Met to Update Plan | 4 Qtr 2006 Retiree |
4 Qtr 2006 EE |
4 Qtr 2003 EE |
| Yes | 68%sig | 41%SIG | 54% |
| No | 32%sig | 59%SIG | 46% |
| N=165 | N=174 | N=242 |
SIG= Significant at the 95% confidence level
sig - varies significantly (95% level) from retiree and employee comparison
Four out of ten employees and retirees say they have someone they trust and look to for advice on how to save for retirement.
Table 9
"Do you currently have someone whom you trust and look to for advice on how to save for retirement?"
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| Someone for Retirement Advice | 4 Qtr 2006 Retiree |
4 Qtr 2006 EE |
4 Qtr 2003 EE |
| Yes | 41% | 40%SIG | 44% |
| No | 59% | 60%SIG | 56% |
| N=630 | N=1197 | N=1344 |
SIG= Significant at the 95% confidence level
sig - varies significantly (95% level) from retiree and employee comparison
Financial Needs
Employees and retirees were given a list of five financial needs and asked to rank them in importance. The item ranked as most important by the largest number of employees (40%) was retirement planning. This same question was also asked of employees in 2003 and retirement planning was ranked as the most important by significantly more employees (48%).
Savings or accumulation goals were ranked as most important by the largest number of retirees (42%) followed by retirement planning with 24%.
Table 10
"Please rank the following five financial needs in terms of how important they are to you. Type a "1" next to the financial need that is most important to you, a "5" next to the least important financial need, and "2", "3" or "4" next to the financial needs of second, third, and fourth importance to you."
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| Financial Need Importance | Ranked #1 | ||
| Retiree | 4th Qtr 2006 EE |
4th Qtr 2003 EE |
|
| Retirement planning | 24%sig | 40%SIG | 48% |
| Savings or accumulation goals | 42% | 36%SIG | 31% |
| Disability income protection | 15% | 11%SIG | 8% |
| Education planning/funding | 5% | 8% | 8% |
| Estate planning with survivor benefits (life insurance) | 15%sig | 5% | 6% |
| N=630 | N=1197 | N=1344 | |
SIG= Significant at the 95% confidence level
sig - varies significantly (95% level) from retiree and employee comparison
Mandatory Retirement Age
Employees and retirees were asked if they felt companies should have a mandatory retirement age. The results were not statistically significant between employees and retirees. Ten percent of the employees feel there should be a mandatory retirement age compared to 13% of the retirees. Respondents who said there should be a mandatory retirement age were asked to specify what that age should be. The mean or average age provided by retirees was 66.9 years old. The mean or average age for the employee group was 63.4 years.
Table 11
"Do you think companies should have a mandatory retirement age?"
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| Position on Mandatory Retirement Age | 4 Qtr 2006 Retiree |
4 Qtr 2006 EE |
| Yes | 13% | 10% |
| No | 87% | 90% |
sig - varies significantly (95% level) from retiree and employee comparison
Table 12
"What should be the mandatory retirement age?"
Base: n=89 employed U.S. adults and 82 retirees (based on those who feel there should be a mandatory retirement age)
| Mandatory Retirement Age | 4 Qtr 2006 | |
| Retiree | EE | |
| Under age 50 | 0% | 5% |
| Age 50-55 | 1% | 11% |
| Age 56-59 | 0% | 0% |
| Age 60-64 | 9% | 16% |
| Age 65 | 41% | 36% |
| Age 66-69 | 16% | 9% |
| Age 70 or older | 33% | 23% |
| Mean | 66.9 years | 63.4 years |
| N=82 | N=89 | |
sig - varies significantly (95% level) from retiree and employee comparison
Note: due to small sample size data should be used directionally
Average Cost of a Doctor's Office Visit
Employees and retirees were asked to estimate the average cost of an average doctor's office visit for someone who does not have insurance. The majority of employees (68%) and retirees (62%) believe it would cost $85 or more. When comparing employee results with last year, there have been significant increases. See Table 13 below for results.
Table 13 - Average Cost of Doctor's Office Visit
"How much (on average) would you estimate an average doctor's office visit costs someone without any insurance?"
Base: 1197 employed U.S. adults in firms of 10-1,000 employees and 630 retirees
| Average Doctor's Office Visit without Insurance | 4 Q 2006 Retiree |
4 Q 2006 EE |
4 Q 2005 EE |
| Less than $40 | 3% | 3% | 3% |
| $40 to $64 | 14%sig | 10% | 11% |
| $65 to $84 | 21% | 20%SIG | 24% |
| $85 to $109 | 29%sig | 23% | 25% |
| $110 to $134 | 14% | 18%SIG | 15% |
| $135 to $150 | 8%sig | 13%SIG | 9% |
| More than $150 | 11% | 14% | 12% |
| N=630 | N=1197 | N=1213 |
SIG= Significant at the 95% confidence level
sig - varies significantly (95% level) from retiree and employee comparison
