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The Principal Financial Well-Being IndexSM Employee and Retiree Comparison Questions - Second Quarter 2008

Employee Financial Well Being

In measuring employees' and retirees' attitudes and perceptions about their financial well-being, a series of different questions were asked of them. They were asked to identify how much they agreed with some statements relating to how concerned they are about their long-term financial future, how happy they are about their current well-being, and if they have planned for retirement.

As seen in Table 1, employees (64%) are significantly more likely than retirees (41%) to be concerned about their long-term financial future. Significantly fewer retirees (41%) are concerned about their long-term financial future compared to this time last year (48%). Female employees (72%) are significantly more likely than male employees (58%) to agree that they are very concerned about their long-term financial future.

Almost half (46%) of the retirees are extremely happy about their current financial well-being compared to 34% of the employees.

Just over a quarter of employees (27%) have not yet planned for their retirement savings/security.

Table 1
Please indicate the extent to which you agree or disagree with the following statements…”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees


(% of respondents agreeing completely or somewhat)
2 Qtr 2008 2 Qtr 2007 2 Qtr 2006 2 Qtr 2005 2 Qtr 2004
Retiree EE Retiree EE Retiree EE EE EE
I am very concerned about my long-term financial future. 41%sig^ 64% 48% 63% 48% 68% 74% 76%
I am extremely happy about my current financial well-being. 46%sig 34% 45% 31% 45% 30% 29% 28%
I have not yet planned for retirement savings/security. N/A 27% N/A 24% N/A 30% 29% 24%

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 retiree comparison

American Dream

Employees and retirees were asked if they feel the American Dream has been or will be harder to achieve than it was for their parent's generation. Over half (59%) of the employees agree it has been or will be harder to achieve compared to only 41% of the retirees.

Table 2
“The notion of “The American Dream” has involved holding a good job, owning a home, living in a secure community, and sending the children to a good school. To what extent do you agree with the following phrase: The American Dream has been or will be harder for me to financially achieve than it was for my parent's generation.”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008 2 Qtr 2007 3 Qtr 2005
EE
Retiree EE Retiree EE
Agree completely 20% 23%SIG 17% 31% 40%
Agree somewhat 21%sig 36%SIG 20% 25% 30%
Neither agree nor disagree 23%sig 15% 24% 17% 15%
Disagree somewhat 22% 18% 22% 19% 10%
Disagree completely 13% 9% 17% 8% 5%

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

State of the Economy

Employees and retirees were asked about their thoughts on the current state of the economy. Six out of ten retirees and nearly as many employees (58%) think we are currently in a recession. These are significant increases from 1st quarter of 2008 when only 41% of retirees and 42% of employees believed we were in a recession. Furthermore, a third of employees (34%) and 29% of retirees fear we are heading in the direction of a recession.

Table 3
“How do you feel about the current state of the economy?”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008 1 Qtr 2008 4 Qtr 2007
Retiree EE Retiree EE Retiree EE
I think we are in a recession. 60%^ 58%SIG 41% 42% 24% 21%
I do not think we are in a recession, but I fear we are heading in that direction. 29%^ 34%SIG 45% 46% 48% 50%
I do not think we are close to a recession. 6%^ 4%SIG 10% 6% 14% 13%
Not sure 4% 3%SIG 5% 6% 14% 16%

SIG= Significant at the 95% confidence level from previous results employee comparison
^ – varies significantly (95% level) from previous retiree comparison

Employees and retirees were asked how they would reduce their spending due to an economic slow down. The top methods selected for both retirees and employees were eating fewer meals at restaurants, spending less on clothing and other consumer items, and cutting back on entertainment. Over half of employees and retirees also indicated they would save gas money by doing things like driving less, car pooling or using public transportation. Note that significantly more retirees and employees selected many of these methods for potentially reducing their spending than when this question was asked last time in 4th quarter of 2007.

Among employees, female employees (83%) were significantly more likely to indicate they would spend less on clothing or other consumer goods than male employees (65%).

Table 4
“If you had to reduce your spending due to an economic slow down, which of the following would you be likely to do?”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008 4 Qtr 2007
Retiree EE Retiree EE
Eat fewer meals at restaurants 66%sig^ 79% 49% 76%
Spend less on clothing or other consumer goods 66%sig^ 74%SIG 49% 69%
Cut back on entertainment, such as going to movies, concerts or other events 56%sig^ 76%SIG 39% 63%
Save gas money by driving my car less, car pooling or using public transportation 56%^ 52%SIG 38% 36%
Purchase take out coffee less frequently 23%sig^ 34%SIG 10% 27%
Lower my retirement plan contribution rate 1%sig 8%SIG 1% 11%
Not pay my credit card bill for at least a month 2% 4% 1% 4%
Not pay my mortgage for at least a month <1%sig 2% 1% 2%
None of these 13%sig^ 5%SIG 27% 9%

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 retiree comparison

When asked how the current economy has impacted their overall spending in the past two months, over a third of retirees (36%) and employees (36%) said their spending has remained about the same. Just over half of retirees (55%) and employees (56%) have reduced their overall spending to some degree. Significantly more employees and retirees have reduced their overall spending compared to 4th quarter of 2007.

Table 5
“Which of the following best describes how the current economy has impacted your overall spending in the past two months?”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008 4 Qtr 2007 1 Qtr 2007 1 Qtr 2004
EE
Retiree EE Retiree EE Retiree EE
I have greatly increased my overall spending 3% 2% 2% 2% 1% 2% 4%
I have increased my overall spending a little 7% 6% 6% 6% 6% 10% 26%
My overall spending is about the same 36%^ 36%SIG 60% 54% 53% 50% 26%
I have reduced my overall spending a little 36%^ 41%SIG 22% 27% 24% 27% 31%
I have greatly reduced my overall spending 19%^ 15%SIG 10% 11% 17% 12% 13%
N=673 N=1,117 N=514 N=1,154 N=536 N=1,181 N=1,235

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 retiree comparison

Economic Stimulus Plan

Retirees and employees were asked how they plan to spend the tax rebate they will receive as part of President Bush's plan to stimulate the economy. Commonly selected methods by employees are pay down or pay off short-term debts (26%), save or invest the refund (25%), and pay monthly bills (23%). Retirees are most likely planning to save or invest the refund (20%) or pay monthly bills (16%). Note that a quarter of retirees are not sure how they will spend their economic stimulus payment.

Table 6
“How do plan to spend your tax rebate that you will receive as part of President Bush's plan to stimulate the economy? Please select all that apply.”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008
Retiree EE
Pay down or pay off short-term debts 11%sig 26%
Save or invest the refund 20% 25%
Pay monthly bills 16%sig 23%
Pay down or pay off longer-term debts 5%sig 15%
Spend on consumer products – clothing, electronics, etc. 8%sig 12%
Spend on a big ticket item 2%sig 6%
Other 14%sig 7%
Not sure 25%sig 12%
I don't plan to receive a tax rebate 10% 8%

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

Respondents were asked if they believed President Bush's plan to stimulate the economy in the form of tax rebates will be effective at improving the economy. Only 14% of retirees and 19% of employees expressed some level of agreement that President Bush's plan will be effective at stimulating the economy. In fact, 58% of retirees and 55% of employees disagreed to some extent that this plan will help stimulate the economy.

Table 7
“President Bush's plan to stimulate the economy in the form of tax rebates will be effective at improving the economy.”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008
Retiree EE
Strongly agree 3% 4%
Agree 11% 15%
Neither disagree no agree 22% 22%
Disagree 32% 30%
Strongly disagree 26% 25%
Not sure 6% 5%

Investment Changes

Changing market conditions can spur some individuals to make changes to their investments. To measure what changes are being made, employees and retirees were asked to identify if and how they are moving their retirement savings. Based upon their responses, 74% of employees who have retirement savings are not making changes to their investments while 27% are – 22% to stable and 5% to volatile. Compared to 4th quarter of 2007, significantly more employees have moved from volatile to stable investments.

Just over three quarters (77%) of retirees have not made any investment changes, while 23% have moved their investments. Of the 23% of retirees who have made investment changes, 19% have moved to more stable investments.

Table 8
“Given the current stock market and economic conditions, have you made changes in how you have your retirement savings invested?”
Base: Those with retirement savings

2 Qtr 2008 4 Qtr 2007 4 Qtr 2005 4 Qtr 2004
Retiree EE Retiree EE
Yes, I moved from more volatile to more stable investments 19% 22%SIG 18% 15% 15% 21%
Yes, I moved from more stable to more volatile investments. 4% 5% 3% 6% 9% 10%
No, I have not made any changes 77% 74%SIG 79% 79% 77% 69%
N=523 N=905 N=401 N=953 N=1,007 N=1,490

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

Rising Fuel Costs

To compensate for rising fuel costs, over half of retirees and employees (56% of both groups) indicate they are driving less. Furthermore, over a quarter of retirees (27%) and a third of employees (36%) also reported they have reduced their spending on basic necessities.

Female employees (47%) are more likely than male employees (26%) to report they have reduced their spending on basic necessities due to rising fuel costs.

Nearly four out of ten retirees (38%) and three out of ten employees (29%) said they have not made any financial changes to compensate for rising fuel costs.

Table 9
“What financial changes, if any, have you made to compensate for rising fuel costs? Please select all that apply.”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008
Retiree EE
I am driving less 56% 56%
I have reduced my spending on basic necessities 27%sig 36%
I am carpooling more often for my transportation needs 3%sig 9%
I have fallen behind on my monthly bills 3%sig 7%
I am using public transportation more often 5% 6%
I have reduced contributions to my retirement savings plan <1%sig 3%
I have not made any changes 38%sig 29%

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

Employees and retirees were asked if the rising cost of fuel has influenced various activities in their lives. For employees, rising fuel costs have affected their automobile purchasing decisions (35%) and holiday vacation plans (35%). Retirees' holiday vacation plans (33%) and automobile purchasing decisions (20%) have been influenced by the rising cost of fuel.

As illustrated in Table 10, there are significant differences in how it is impacting retirees and employees when compared to last year. Significantly more employees this year than last year say it has impacted holiday vacation plans.

Over a third of retirees and a quarter of employees responded that it has made no impact.

Table 10
“Has the rising cost of fuel influenced any of the following in your life? Please select all that apply.”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008 2 Qtr 2007 2 Qtr 2006 3 Qtr 2005
Retiree EE Retiree EE Retiree EE EE
Automobile purchasing decisions 20%sig^ 35% 29% 33% 31% 38% 32%
Holiday vacation plans 33% 35%SIG 28% 29% 34% 40% 41%
The decision to carpool or use alternate means of transportation on a given day 10%sig 17% 9% 18% 7% 16% 17%
Other 25%sig 19% 22% 18% 30% 21% 14%
Grade of fuel used 11% 14% 9% 14% 11% 18% 19%
The rising cost of fuel has made no impact on
my lifestyle
35%sig 25%SIG 39% 29% 33% 27% 29%
N=673 N=1,117 N=548 N=1137 N=638 N=1100 N=1147

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 retiree comparison

Rising Grocery Prices

Employees and retirees were asked how they are dealing with recent increases in grocery prices. Six out of ten (61%) employees and nearly half of retirees (49%) indicate they are going out to eat less to offset increases in grocery prices. Around half of both retirees (47%) and employees (55%) are purchasing store or generic brands and 44% of both employees and retirees are clipping coupons more. Over a third of both retirees (35%) and employees (37%) are sacrificing convenience and premium items for lower cost alternatives. Furthermore, a third or so of retirees (34%) and employees (36%) are shopping at multiple stores to take advantage of current sales.

Female employees are significantly more likely than male employees to indicate they are going out to eat less (66% versus 55% of males), purchasing store or generic brands (63% versus 47% of males), and clipping coupons more (49% versus 39% of males).

Table 11
“How are you dealing with the recent increases in grocery prices? Please check all that apply.”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008
Retiree EE
Going out to eat less 49%sig 61%
Purchasing store or generic brands 47%sig 55%
Clipping coupons more 44% 44%
Sacrificing convenience and premium items for lower cost alternatives 35% 37%
Shopping at multiple stores to take advantage of current sales 34% 36%
Buying in bulk 17%sig 26%
Becoming a member of a wholesale store such as Sam's Club or Costco 17% 16%
Putting grocery purchases on credit cards 13%sig 8%
Other 7% 6%
None of the above 18% 14%

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

Over a quarter (29%) of retirees estimate their weekly spending on groceries has increased by less than $25 compared to last year. Over a third of retirees (35%) estimate their spending has increased between $25 to $49 per week. One out of five retirees indicated they are not spending more on groceries per week this year compared to last year.

Approximately one out of five employees (19%) indicate their weekly spending on groceries has increased by less than $25 compared to last year. Forty percent of employees estimate their grocery spending has increased $25 to $49 per week since last year. Fifteen percent of the employees indicate they are not spending more this year compared to last year on groceries.

Table 12
“On average, how much more per week are you spending on groceries now compared to this time last year?”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

  2 Qtr 2008
Retiree EE
Less than $25 per week 29%sig 19%
$25 to $49 per week 35% 40%
$50 to $74 per week 10%sig 17%
$75 to $99 per week 2%sig 5%
$100 to $149 per week 3% 4%
$150 or more per week <1% 2%
I am not spending more on groceries per week now compared to last year 20%sig 15%

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

Emergency Fund

Approximately seven out of 10 retirees (69%) and six out of ten employees (58%) have an emergency fund of money they can immediately access if necessary.

Male employees (63%) are significantly more likely than female employees (53%) to have an emergency fund. In addition, age differences exist in that those employees aged 55 years or older (71%) are significantly more likely to have an emergency fund than employees aged 18 to 34 years (57%), 35 to 44 years (55%), and 45 to 54 years (51%).

Over half of retirees (54%) said they could cover over 6 months of living expenses with their emergency fund, compared to only 29% of employees. Most employees said they could cover one to two months of living expenses (25%) or three to four months of living expenses (32%) with their emergency fund.

Table 13
“Do you have an emergency fund of money that you can immediately access in the event of a job loss or other unanticipated major expense?
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008

Retiree

EE

Yes 69%sig 58%
No 31%sig 42%

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

Table 14
“How many months of living expenses could you cover with your emergency fund?”
Base: 626 employed U.S. adults in firms of 10-1,000 employees and 475 retirees with an emergency

2 Qtr 2008
Retiree EE
Less than 1 month 2% 4%
1 – 2 months 12%sig 25%
3 – 4 months 20%sig 32%
5 – 6 months 12% 10%
Over 6 months 54%sig 29%

fund

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

Summer Vacation Plans

Employees and retirees were asked if the current state of the economy has influenced their summer vacation plans. A third of retirees and slightly more employees (37%) responded they have not changed their summer vacation plans. Thirty-two percent of employees and 22% of retirees have altered their vacation plans to some extent. Four out of ten retirees and about a quarter of employees (26%) were not planning to take a vacation this summer.

Table 15
“Has the current state of the economy influenced your summer vacation plans?”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008
Retiree EE
I have drastically altered my summer vacation plans to save money 13% 12%
I have slightly altered my summer vacation plans to save money 9%sig 20%
I have not changed my summer vacation plans 33% 37%
I have slightly altered my summer vacation plans to spend more money 2% 2%
I have drastically altered my summer vacation plans to spend more money 3% 2%
I was not planning to take a summer vacation this summer 40%sig 26%

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

Employees and retirees were provided with a list of things that could potentially impact their summer vacation plans. Rising fuel prices was selected by just over half of the retirees (56%) and employees (57%) as something they fear could potentially impact their summer vacation plans – these are significant increases from this time last year. Over a third of the employees (35%) and a quarter of retirees (27%) also fear that not having enough money saved for vacation could impact their plans.

Up significantly from this time last year, nearly a quarter of employees (23%) fear a job loss could impact their summer vacation plans. Also up significantly from last year, 20% of employees and retirees fear airline delays or cancellations could affect their summer vacation plans.

Nearly three out of ten retirees (28%) have no fear that anything will impact their summer vacation plans, compared to only 17% of employees.

Table 16
“Which of the following do you fear could potentially impact your summer vacation plans? Please select all that apply”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008 2 Qtr 2007
Retiree EE Retiree EE
Rising fuel prices 56%^ 57%SIG 46% 47%
Having enough money saved for vacation 27%sig 35%SIG 23% 47%
Loss of job N/A 23%SIG N/A 15%
Airline delays/cancellations 20%^ 20%SIG 12% 11%
Too busy at work N/A 19%SIG N/A 38%
Job switch N/A 9%SIG N/A 12%
Other 9%sig 4%SIG 7% 6%
I have no fear that anything will impact my summer vacation plans. 28%sig^ 17% 40% 17%
N=673 N=1,117 N=548 N=1137

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 retiree comparison

Home Improvements

One quarter of the retirees and just over a third of the employees surveyed are planning to do home improvements this summer. Fewer retirees (25% versus 35% in 2007) and fewer employees (37% versus 45% in 2007) are planning to do home improvements this summer compared to last summer.

Approximately half of retirees (57%) and employees (49%) will be using money from savings to pay for the home improvements. Credit cards and tax refunds will also be used to finance the home improvements to a larger extent this year over last year by both employees and retirees.

Table 17
“Are you planning to do any home improvement projects this summer?”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008 2 Qtr 2007
Retiree EE Retiree EE
Yes 25%sig^ 37%SIG 35% 45%
No 75%sig^ 63%SIG 65% 55%
N=673 N=1,117 N=548 N=1,137

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 retiree comparison

Table 18
“How do you plan to pay for the home improvement projects? Please select all that apply.”
Base: employees and retirees who plan to do a home improvement project this summer

2 Qtr 2008 2 Qtr 2007
Retiree EE Retiree EE
Savings 57%^ 49%SIG 73% 63%
Credit Card 22%^ 22%SIG 13% 16%
Tax Refund 10%^ 17%SIG 4% 11%
Home Equity Loan 6% 13% 11% 12%
Personal Loan 5% 3% 2% 2%
Loan from retirement account 1% 1% 1% 2%
Other 19% 22% 16% 19%
N=203 N=398 N=189 N=511

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

Life Insurance

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 (40%), followed by large medical expense due to a serious illness or accident (22%). Over a quarter (26%) 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. Thirteen percent of retirees are not sure which of the items listed would set them back most financially.

Table 19
“What do you fear would set you back most financially?”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008 3 Qtr 2007
Retiree EE Retiree EE
Loss of job 1%sig 40% 1% 41%
Large medical expense due to serious illness or accident 26%^ 22% 37% 23%
Disability of spouse or self 10% 10% 9% 10%
Death of a spouse 10% 8% 12% 7%
Natural disaster 13%sig^ 5% 9% 3%
House fire 7%sig 3% 5% 2%
Totaling my car 2% 3% 1% 2%
Divorce 3% 3% 2% 2%
Other 8%sig 1% 6% 1%
None 7%sig 2% 10% 1%
Not Sure 13%sig^ 4%SIG 9% 7%
N=673 N=1,117 N=554 N=1,214

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 retiree comparison

Employees were asked what they feel is an adequate amount of life insurance for themselves. One in five of the employees (22%) are not sure. Four percent don't feel that they need any life insurance. Almost half (46%) feel they need two or five times their salary.

Table 20
“What is an adequate amount of life insurance for you personally?”
Base: 1,117 qualified employee respondents

2 Qtr 2008
EE
3 Qtr 2007
EE
Two times my salary 14%SIG 17%
Five times my salary 32%SIG 28%
Ten times my salary 19% 16%
More than ten times my salary 9% 7%
Not sure 22%SIG 26%
None, I do not need life insurance 4%SIG 6%
N=1,117 N=1,214

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

Forty-nine percent of employees and 51% of retirees personally own a life insurance policy on themselves (where they pay 100% of the premium). Some regional differences exist in life insurance policy ownership. Employees from the West (39%) are significantly less likely to own life insurance than employees from the East (52%), Midwest (51%), and South (52%). In addition, male employees (53%) are more likely to own a life insurance policy than female employees (44%).

Forty percent of retirees and 42% of employees feel either somewhat unknowledgeable or not at all knowledgeable about individually owned life insurance. Only 16% of employees and 12% of retirees feel either very or extremely knowledgeable about this type of insurance. See Table 21 for details.

Table 21
“How knowledgeable do you feel about individually owned life insurance?”
Base: 522 employed U.S. adults in firms of 10-1,000 employees and 357 retirees who own a life insurance policy

2 Qtr 2008
Retiree EE
Extremely knowledgeable 1%sig 5%
Very knowledgeable 11% 11%
Knowledgeable 47% 41%
Somewhat unknowledgeable 31% 33%
Not at all knowledgeable 9% 9%
N=357 N=522

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

When asked how often they see or communicate with the individual who sold them the insurance, 31% of retirees and 37% of employees reported rarely. Forty-five percent of retirees and 29% of employees reported they never see or communicate with the individual who sold them the insurance.

Table 22
“How often do you see or communicate with the individual who sold you the insurance?”
Base: 522 employed U.S. adults in firms of 10- 1,000 employees and 357 retirees who own a life insurance policy

2 Qtr 2008
Retiree EE
Always 0% 2%
Often 5% 8%
Sometimes 19% 24%
Rarely 31% 37%
Never 45%sig 29%
N=357 N=522

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

Employees and retirees were asked how recently they reviewed their current life insurance policy. Approximately one out of five retirees (19%) and employees (23%) indicated they have reviewed their life insurance policy in the last six months. Another third of retirees and employees said they have reviewed their policy in the last year. A third of employees and significantly fewer retirees (23%) indicated they have reviewed their policy in the last five years.

Table 23
“How recently have you reviewed your current life insurance policy?”
Base: 522 employed U.S. adults in firms of 10-1,000 employees and 357 retirees who own a life insurance policy

2 Qtr 2008
Retiree EE
In the last 6 months 19% 23%
In the last year 33% 34%
In the last 5 years 23%sig 33%
In the last 10 years 9% 5%
More than 10 years 15%sig 6%
N=357 N=522

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

When asked how they would pay for expenses if something were to happen to them or their spouse, employees (22%) were most likely to say they would depend on life insurance benefits offered through their employer or their spouse's employer, followed closely by life insurance benefits from their personal life insurance policy (20%). In contrast, retirees (21%) are most likely to withdraw from personal savings or sell investments such as stocks, bonds or mutual funds (15%). Moreover, at least 20% of retirees (20%) and employees (23%) are not sure how they would pay for expenses if something were to happen to themselves or their spouse.

Table 24
“If something were to happen to you or your spouse, how would you pay for expenses?”
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

2 Qtr 2008
Retiree EE
Depend upon life insurance benefits through my/my spouse's employer's life insurance coverage 9%sig 22%
Depend on life insurance benefits from my/my spouse's own personal life insurance policy 16% 20%
Withdraw from personal savings 21%sig 11%
Hardship withdrawal from retirement savings 3%sig 7%
Sell investments – stocks, bonds, mutual funds 15%sig 4%
Rely financially on spouse/significant other or family 2% 4%
Sell other investments 1% 2%
Not sure 20% 23%
None of these 13%sig 8%
N=673 N=1,117

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

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