Employees are putting their 401(k) contributions on the back burner as their concerns about paying for health care continue to grow, according to a Mercer workplace survey.
The survey of retirement plan participants who also receive health benefits at work found a host of contradictions in 2013, including the belief that the U.S. economy is improving but that those surveyed aren’t seeing a positive impact in their own households yet.
The majority feel confident about their investment decisions but pessimistic about their retirement outlook and they aren’t planning to increase their 401(k) contributions next year. Those closest to retirement are actually planning to decrease their contributions by about 18 percent, the survey found.
Most are worried about how they will pay for health care in retirement, yet only 35 percent believe they’ll have enough money to pay for it. Paying for health care in retirement is now the No. 1 concern for people over the age of 50.
Despite their concerns, the majority of those surveyed were not planning on increasing their savings to help tackle these problems.
These diverging participant attitudes present a major challenge for plan sponsors, according to Mercer, especially those facing other workforce issues such as career path barriers and sluggish retention rates. The company recommends that plan sponsors boost their educational offerings to help get employees to boost their savings and understand why their workplace benefits are important.
Mercer conducted online interviews of 1,506 employees between May 28 and June 5, 2013, for its survey.