Skip navigation.
Go to the Principal Financial Group(R) home page
Secure  Account Login

Select login type:


Well-Being Index
Quick Links
Tools

The Principal Financial Well-Being IndexSM Employee and Retiree Comparison Questions - Third Quarter 2007

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 (67%) are significantly more likely to be concerned about their long-term financial future than retirees (52%).

Almost half (46%) of the retirees are extremely happy about their current financial well-being compared to only (28%) of the employees.  There are significant differences between responses from retirees and employees – indicated with “sig” below. 

Almost one-third of employees (30%) have not yet planned for retirement savings and security. 

Table 1
Please indicate the extent to which you agree or disagree with the following statements…”
Base: 1214 employed U.S. adults in firms of 10-1,000 employees and 554 retirees

(% of respondents agreeing completely or somewhat) 3 Qtr 2007 3 Qtr 2006 3 Qtr 2005 3 Qtr 2004
Retiree EE Retiree EE EE EE
I am very concerned about my long-term financial future. 52%sig 67% 48% 68% 77% 78%
I am extremely happy about my current financial well-being. 46%sig 28% 50% 28% 22% 26%
I have not yet planned for retirement savings/security. N/A 30% N/A 27% 33% 27%

sig – varies significantly (95% level) from retiree and employee comparison

Financial Planning Assistance

Employees and retirees were asked to name the best lesson learned from receiving financial planning advice.  Almost half of the employees (45%) and significantly more retirees (61%) said they have not received any financial planning assistance.  The most frequently mentioned best lesson by both retirees (19%) and employees (20%) was to “diversify my portfolio”. 

Table 2
“What is the best lesson you have learned from receiving financial planning assistance?”
Base: 1214 employed U.S. adults in firms of 10-1,000 employees and 554 retirees

Best lesson you have learned 3 Qtr 2007 3 Qtr 2006
Retiree EE Retiree EE
Diversify my portfolio 19% 20% 19% 20%
Invest maximum in 401(k)/403(b) plan, IRA or
non-qualified plan
8%sig 17% 10% 16%
Increase deferral into 401(k)/403(b) plan 1%sig 9% 1% 8%
Become more conservative with investment strategy 5% 4% 7% 3%
Make company stock a smaller portion of my retirement savings 1% <1% <1% 2%
Other 5% 4% 4% 3%
I have not received any financial planning assistance. 61%sig 45%SIG 57% 50%
  N=554 N=1214 N=721 N=1360

SIG – varies significantly (95% level) from previous results employee comparison
sig – varies significantly (95% level) from retiree and employee comparison

Financial Planning Regrets

Respondents were asked what financial planning regrets they had, if any.  Two out of five (43%) retirees and three out of ten (29%) employees didn’t have any financial planning regrets.  The regret cited most often by both retirees and employees was that they started saving too late. 

Table 3
“What regrets do you have, if any, regarding your financial planning?”
Base: 1214 employed U.S. adults in firms of 10-1,000 employees and 554 retirees

What regrets do you have 3 Qtr 2007 3 Qtr 2006
Retiree EE Retiree EE
Started saving too late 30%sig 43% 32% 45%
Deferred too little in early working years 22% 28% 22% 27%
Thought I could manage it on my own 15%sig* 9% 10% 9%
Did not defer bonus or salary into a retirement account 10% 7% 8% 8%
Made poor choices regarding mutual fund options 5%* 7% 8% 7%
Other 13%* 9% 8% 8%
Don’t have any regrets 43%sig 29% 39% 27%
  N=554 N=1214 N=721 N=1360

sig – varies significantly (95% level) from retiree and employee comparison
* - varies significantly (95% level) from previous results retiree comparison

Retirement Issues

Employees were given a list of issues and asked to identify which ones keep them awake at night.  Being able to afford good medical care and being able to enjoy the same quality of life that I live now are the issues mentioned most often by employees (39%). Female employees are significantly more concerned about being able to afford/pay for the basic necessities than males.  Males are significantly more likely to say that none of the items listed keep them awake at night.   See details in Table 4.  The issue cited most often by retirees (29%) is being able to afford good medical care, followed closely by the rising cost of inflation reducing purchasing power (28%). 

Table 5 shows the results when asked to identify which ONE issue they are most concerned about in thinking ahead to their financial well-being.   When having to select only one issue, the issue chose most often by retirees was being able to afford good medical care (20%) followed closely by a tie between being able to afford and pay for the basic necessities (19%) and the rising cost of inflation reducing purchasing power (19%).  The issue of most concern to employees is being able to afford/pay for the basic necessities (29%).    

Table 4
“In thinking ahead to your financial well-being in retirement, which of the following keeps you awake at night?”
Base: 1214 employed U.S. adults in firms of 10-1,000 employees and 554 retirees

Keeps you awake at night 3 Qtr 2007 3 Qtr 2006 3 Qtr 2005 2007 Gender
Retiree EE Retiree EE EE Male
EE
Female
EE
Being able to afford good medical care 29%sig 39%SIG 26% 43% 49% 38% 40%
Being able to enjoy the same quality of life that I live now/lived before I retired 20%sig 39% 20% 42% 47% 37% 40%
Being able to afford/pay for the basic necessities 21%sig 38% 22% 38% 46% 31%^ 47%
Outliving my savings 24%sig 32% 23% 33% 34% 33% 31%
Rising cost of inflation reducing purchasing power 28%* 28%SIG 37% 33% N/A 29% 27%
Being able to afford vacations/visiting grandkids 11%sig 20% 14% 22% 27% 22% 19%
Being able to pay for assisted living/long term care 23% 20% 24% 22% 24% 19% 21%
Invested too conservatively and earnings haven’t kept up with inflation 6% 9%SIG 7% 13% N/A 10% 7%
None of these 38%sig 26% 35% 27% 20% 31%^ 20%

SIG – varies significantly (95% level) from previous results employee comparison
sig – varies significantly (95% level) from retiree and employee comparison
* - varies significantly (95% level) from previous results retiree comparison
^ – varies significantly (95% level) from gender comparison

Table 5
“In thinking ahead to your financial well-being in retirement, which is the one issue that you are most concerned about?”
Base: N= 938 employed U.S. Adults and 332 retirees (based on respondents who have an issue keeping them awake at night)

One issue most concerned about 3 Qtr 2007 2007 Gender
Retiree EE Male
EE
Female
EE
Being able to afford/pay for the basic necessities 19%sig 29% 22% 35%
Being able to enjoy the same quality of life that I live now/lived before I retired 9%sig 22% 22% 22%
Being able to afford good medical care 20% 20% 21% 19%
Outliving my savings 14% 14% 17% 12%
Rising cost of inflation reducing purchasing power 19%sig 9% 10% 8%
Being able to pay for assisted living/long term care 16%sig 3% 4% 3%
Being able to afford vacations/visiting grandkids 2% <1% 3% 1%
Invested too conservatively and earnings haven’t kept up with inflation 3% 1% 2% 1%

sig – varies significantly (95% level) from retiree and employee comparison
^ – varies significantly (95% level) from gender comparison

Financial Set Backs

Employees and retirees were provided a list and asked what they fear would set them back the most financially.  The answer given most frequently by employees was loss of job (41%).  Over one-third (37%) of retirees cited a large medical expense due to serious illness or accident as the thing they fear would set them back the most financially.  One in ten retirees felt that none of the items listed would set them back most financially.

Table 6
“What do you fear would set you back most financially?”

Set you back most financially 3 Qtr 2007
Retiree EE
Loss of job 19%sig 41%
Large medical expense due to serious illness or accident 37%sig 23%
Disability of spouse or self 9% 10%
Death of a spouse 12%sig 7%
Natural disaster 9%sig 3%
House fire 5%sig 2%
Totaling my car 1% 2%
Divorce 2% 2%
Other 6%sig 1%
None 10%sig 1%
Not Sure 9% 7%
  N=554 N=1214

sig – varies significantly (95% level) from retiree and employee comparison

Teaching Financial Literacy

Respondents were given options on where they prefer/preferred their children to learn about financial literacy.  One out of five employees (22%) and retirees (19%) prefer to have their children learn about financial literacy in the classroom because they do not consider themselves to be sufficiently literate in financial matters.  A similar percentage of employees (21%) and retirees (24%) prefer to teach their children at home because they think they are a good example of financial responsibility.  There were significant differences between male and female employee responses.  Males are significantly more likely than females to say they prefer to teach them at home because they are a good example of fiscal responsibility.  Females are significantly more likely than males to say they prefer children learn in the classroom because they do not consider themselves to be sufficiently literate in financial matters. 

Table 7
“When it comes to teaching your children about financial literacy, do you/did you prefer they learn primarily at home or in the classroom?”

Teaching your children 3 Qtr 2007 3 Qtr 2007
EE Gender
Retiree EE Male Female
I prefer they learn in the classroom because I do not have time to teach them. 2% 3% 4% 2%
I prefer they learn in the classroom because I do not consider myself to be sufficiently literate in financial matters. 19% 22% 17%^ 26%
I prefer to teach them at home because I think I’m a good example of fiscal responsibility. 24% 21% 25%^ 17%
I prefer to teach them at home, but will have to tell them to do as I say, not as I do, because I am not a good example of financial literacy. 9% 8% 7% 10%
Other 19%sig 7% 6% 9%
I do not have any children. 27%sig 39% 41% 36%
  N=554 N=1214 N=724 N=490

sig – varies significantly (95% level) from retiree and employee comparison
^ – varies significantly (95% level) from gender comparison

Financing Education

The majority of employees (84%) and retirees (84%) feel that children should have partial or full responsibility for financing their college education.   A significantly larger portion of the under age 35 respondents feel that children should have minimal or no responsibility for financing their college education than the respondents age 35 and older.   See Table 8 for details.

Employees and retirees were asked if they have children still in school, how they are primarily planning to fund their children’s college education.  For those employees who have children, the answer with the largest number of responses was hoping for scholarships and student loans to cover most of the cost for education (16%).  Only ten percent of employees are planning in advance.

Table 8
“What level of responsibility do you believe children should have in financing their college education?”
Base: 1214 employed U.S. adults in firms of 10-1,000 employees and 554 retirees

Level of responsibility children should have 3 Qtr 2007 3 Qtr 2005 4 Qtr 2002 3 Qtr 2007
Respondent Age Groups
Retiree EE EE EE 18-34 35-44 45-54 55+
Full Responsibility 13% 14% 13% 9% 12% 12% 19% 13%
Partial Responsibility 71% 70% 69% 73% 65% 76% 68% 75%
Minimal or No Responsibility 8% 11%SIG 16% 14% 17% 9% 8% 7%
Not Sure 8% 5%SIG 2% 42% 6% 3% 5% 5%

SIG – varies significantly (95% level) from previous results employee comparison

Table 9
“If you have children still in school, how are you primarily planning to fund their college education?”

Fund college education 3 Qtr 2007
Retiree EE
I am hoping for scholarships and student loans to cover most of my children’s education. 2%sig 16%
I am planning in advance and investing ahead of time. 1%sig 10%
I do not have a savings plan in place but will just pay as they go. 1%sig 5%
I have absolutely no plan in place. 2%sig 5%
Other 1% 2%
I do not have children/I do not have children still in school. 93%sig 61%
  N=554 N=1214

sig – varies significantly (95% level) from retiree and employee comparison

Student Loans

Employees and retirees were asked at what age they expect to have all their student loans paid off.  The overwhelming majority of retirees (90%) never had any student loans.  Employees with student loans (43%) were most likely to pay off their student loans between ages 30-39 (17%) and between ages 22-29 (12%).

Table 10

“When do you expect to (or did you) have all your student loans paid off?”

3 Qtr 2007
Retiree EE
Between ages 22-29 3%sig 12%
Between ages 30-39 2%sig 17%
Between ages 40-49 1%sig 8%
Between ages 50-59 1% 2%
Age 60 or older 2% 3%
I never expect to pay off my student loans. 1% 2%
I never had any student loans. 90%sig 57%
N=554 N=1214

sig – varies significantly (95% level) from retiree and employee comparison

Primary Residence

The majority of employees (65%) and retirees (76%) own their primary residence.  Not surprisingly, retirees (60%) are significantly more likely than employees (14%) to have their homes paid off completely.

Table 11
“Do you own your primary residence?”

Own your primary residence 3 Qtr 2007 3 Qtr 2002
Retiree EE EE
Yes 76%sig 65% 66%
No 24%sig 35% 34%
  N=554 N=1214 N=1612

sig – varies significantly (95% level) from retiree and employee comparison

Table 12
“How much equity do you currently have built up in your primary residence?”

Respondents who own primary residence

How much equity 3 Qtr 2007
Retiree EE
Less than 5% 1%sig 12%
6%-10% 1%sig 10%
11%-15% <1%sig 7%
16%-19% 1%sig 7%
20%-49% 7%sig 17%
50%-99% 22% 18%
My home is completely paid off. 60%sig 14%
Not sure 5%sig 12%
Decline to answer 3% 3%
  N=467 N=876

sig – varies significantly (95% level) from retiree and employee comparison

Plans for Home During Retirement

Employees within 5 years of retirement are most likely planning to keep their existing residence during their retirement, at least at first.  Retirees have kept and plan to keep their existing residence during retirement given current housing market conditions.

Table 13

“If you’re planning to retire within the next 5 years, what do you plan to do with your primary residence given current housing market conditions?”

Respondents who own primary residence

Planning to retire 3 Qtr 2007
EE
I plan to sell my primary residence and downsize as soon as I retire. 5%
I plan to keep my existing residence during retirement, at least at first. 21%
I plan to wait for better housing market conditions, and then sell my primary residence hoping that I can purchase my dream home at a better price. 3%
I have not yet decided what to do with my primary residence during retirement. 8%
I am not planning to retire within the next five years. 63%
  N=876

Table 14
“What have you done or do you plan to do with your primary residence given current housing market conditions?”

Respondents who own primary residence

Plan to do 3 Qtr 2007
Retiree
I sold/plan to sell my primary residence and downsized/plan to downsize. 10%
I kept/plan to keep my existing residence during retirement. 73%
I plan to wait for better housing market conditions, and then sell my primary residence hoping that I can purchase my dream home at a better price. 2%
I have not yet decided what to do with my primary residence during retirement. 15%
  N=467

Using Your Home to Fund Retirement

Employees and retirees who own a home were asked if they have considered taking out a reverse mortgage or selling their house to help fund retirement.  The majority of retirees (78%) and employees (76%) have not considered either of these options.

Table 15
“Have you considered taking out a reverse mortgage or selling your house to help fund your retirement?”

Respondents who own primary residence

Reverse mortgage or selling your house 3 Qtr 2007
Retiree EE
I have not considered either of these options to contribute to my retirement. 78% 76%
Yes, I have considered both of these options to contribute to my retirement. 7% 8%
I have only considered selling my house to contribute to my retirement. 9% 11%
I have only considered a reverse mortgage to contribute to my retirement. 6% 4%
  N=467 N=876

Upcoming Election Issues

Employees and retirees were provided a list of issues and asked which ones they are most concerned about in the upcoming election.  The war in Iraq (65% retirees and 63% employees) and healthcare (63% retirees and 60% employees) topped the list with 60% or more selecting them.  Economy/jobs (52%) and social security (50%) are issues of concern for at least half of the employees.  Over half of the retirees are concerned about social security (58%) and immigration (54%).  Homeland security is an issue of concern for nearly half (49%) of the retirees and 38% of the employees. 

There were some interesting differences in responses based on age.  Employees under age 35 are significantly more likely to say they are concerned about education than respondents in the older age groups (<35 43%; 35-44 33%; 45-54 30%; 55+ 27%), while the older age respondents are more likely to be concerned about homeland security (<35 27%; 35-44 44%; 45-54 44%; 55+ 46%).

Female employees are significantly more likely to be concerned about the war in Iraq and healthcare than male employees (71% vs. 57%).    

Table 16
“What issues are you most concerned about in the upcoming election?”

Upcoming election 3 Qtr 2007
Retiree EE
War in Iraq 65% 63%
Healthcare 63% 60%
Economy/Jobs 42%sig 52%
Social Security 58% 50%
Immigration 54%sig 43%
Homeland Security 49%sig 38%
Education 20%sig 35%
Other 6% 8%
None 3% 3%
  N=554 N=1214

sig – varies significantly (95% level) from retiree and employee comparison

Candidates Ability to Deal with the Issues

Employees and retirees were asked if they have confidence that one or more of the presidential candidates are capable of effectively dealing with a variety of issues.  The results are fairly evenly spread out among the three options of yes, no and not sure.

Some of the most definitive responses came from the retirees with at least 41% saying they did NOT believe there is one or more candidates who are capable of effectively dealing with healthcare (44%), immigration (44%), and social security (41%).  Those same three issues also received the highest percentage of “no” responses from the employees, with healthcare receiving (39%), immigration (39%) and social security (40%).

When comparing male and female employee responses, significantly more males than females responded with a “no” response for social security (45% vs 34%), immigration (43% vs 34%), healthcare (45% vs 31%) and education (37% vs 25%).

Table 17
“In the current field of presidential contenders, do you have confidence that one or more of the candidates are capable of effectively dealing with each of the following issues?”

Base: 1214 employed U.S. adults in firms of 10-1,000 employees and 554 retirees

Presidential contenders 3 Qtr 2007 3 Qtr 2007 3 Qtr 2007
Retiree - Yes EE - Yes Retiree - No EE - No Retiree - Not Sure EE - Not Sure
Education 34% 37% 31% 31% 34% 32%
Economy/Jobs 27%sig 37% 32% 29% 41%sig 34%
War in Iraq 32% 35% 39% 33% 29% 32%
Homeland Security 30% 35% 35% 30% 35% 36%
Healthcare 25%sig 32% 44% 39% 31% 30%
Immigration 22% 27% 44% 39% 34% 35%
Social Security 24% 27% 41% 40% 35% 33%

sig – varies significantly (95% level) from retiree and employee comparison

Investment Club

Employees and retirees were asked a series of questions about investment clubs.  A small minority of employees (3%) and retirees (5%) have either currently or previously participated in an investment club. 

Table 18
“An investment club is a group of people who pool their money to make investments.  Usually, investment clubs are organized as partnerships and, after the members study different investments, the group decides to buy or sell based on a majority vote of the members. 

Are you currently participating or have you participated in an investment club?”

Investment club participation 3 Qtr 2007
Retiree EE
Yes 5% 3%
No 95% 97%
  N=554 N=1214

Table 19
“Why are you participating or did you participate in an investment club?”

Why investment club participation 3 Qtr 2007
Retiree EE
I stand/stood to earn a better return with less risk than I would investing on my own. 8% 50%
My friends/family, colleagues are/were also involved. 38% 45%
I do not/did not know enough about investing to do it on my own. 31% 28%
I expect/expected to earn a significant amount of money. 6% 22%
Other 44% 10%
  N=40 N=35

Note: due to small sample size data should be used directionally

Table 20
“How much money have you, personally, typically allocated to your investment club on an annual basis?”

Money allocated to investment club 3 Qtr 2007
Retiree EE
Less than $500 27% 23%
$500 to less than $1000 18% 31%
$1000 to less than $2000 19% 7%
$2000 to less than $3000 1% 5%
$3000 to less than $4000 0% 7%
$4000 to less than $5000 2% 3%
$5000 or more 4% 6%
Decline to answer 28% 17%
  N=40 N=35

Note: due to small sample size data should be used directionally

Return to top

Have a question? Call us at 1.800.986.3343

Copyright © , Principal Financial Services, Inc.
Disclosures and Terms of Use | Products and Services Disclosures | Privacy and Security
Securities offered through Princor Financial Services Corporation, member SIPC